JetBlue and Spirit Airlines announced on Monday, Mar. 4, the end of their $3.8 billion merger campaign after a court ruling blocked the proposal.
JetBlue said that even though both companies still believed in the benefits of a merger, they felt they were unlikely to meet the required closing conditions before the July 24 deadline and mutually agreed that terminating the deal was the best decision for both firms.
"We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines' interests are better served by moving forward independently," JetBlue CEO Joanna Geraghty said in a statement.
On the other hand, Spirit would receive a $69 million termination fee from JetBlue.
"We are disappointed we cannot move forward with a deal that would save hundreds of millions for consumers and create a real challenger to the dominant 'Big 4' U.S. airlines," Spirit CEO Ted Christie said in a separate statement. "However, we remain confident in our future as a successful independent airline."
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JetBlue, Spirit to Appeal Ruling
The Associated Press reported that the Justice Department filed a lawsuit to block a merger last year, saying it would reduce competition and drive up fares, especially for travelers who depend on low-fare Spirit.
A federal district judge in Boston sided with the government and blocked the deal in a ruling last January, saying it violated antitrust laws.
The airlines have since appealed the ruling, with a hearing set for June.
New York-based JetBlue had argued that the merger would help it compete more effectively against bigger airlines. But there were continuing losses and other problems at Miramar, Florida-based Spirit. Last week, JetBlue had previously warned that it might terminate the agreement.
JetBlue's shares rose more than 5% before the market opened, while Spirit's stock slipped more than 13%.
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