JetBlue Airways has announced the termination of its merger agreement with Spirit Airlines.
The decision was mutually agreed upon as it became apparent that the conditions for completion, including the acquisition of approvals, were unlikely to be met by the contract deadline of July 24. As a result of the termination, JetBlue Airways will pay Spirit Airlines a cancellation fee of $69 million.
JetBlue Airways had announced the acquisition of Spirit Airlines for $3.8 billion in July 2022. The deal was expected to create the fifth-largest airline in the United States, capable of competing with the four major airlines known as the ‘Big Four.’ Payment was made in advance to Spirit Airlines’ shareholders based on the contract. However, a federal district court in Boston issued a judgment in January denying the acquisition.
JetBlue Airways is anticipating more than $300 million in cost reductions through efficiencies in the short term, potentially bringing its operating margin close to the break-even point by 2024. The company is scheduled to announce its plans to investors on May 30.
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