Spirit Shareholders Approve JetBlue Merger

Spirit Shareholders Approve JetBlue Merger

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In late July 2022, JetBlue and Spirit announced plans to merge, after Spirit terminated its merger agreement with Frontier. There’s now a significant update regarding the merger…

Spirit shareholders approve JetBlue takeover

Spirit has today announced that shareholders have approved the merger agreement with JetBlue.

Based on preliminary voting results provided by the independent inspector of election at the special meeting of stockholders held today, more than 50% of the outstanding shares of Spirit common stock voted in favor of the transaction. The final voting results of the special meeting will be filed on a Form 8-K with the Securities and Exchange Commission.

Here’s what Spirit Airlines CEO Ted Christie had to say about this:

“This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant U.S. carriers. We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to Team Members, Guests and stockholders.”

Spirit shareholders voted in favor of a JetBlue merger

Now the deal has to gain regulatory approval

Of course getting shareholder approval is a major hurdle to overcome with a merger, but now JetBlue and Spirit face a much bigger challenge — getting regulatory approval. On paper, JetBlue’s offer for Spirit had been better than Frontier’s all along, though the reason it was initially rejected was over concerns of getting regulatory approval.

Now we’re going to see how that plays out. On the one hand, it would be bad for consumers if an ultra low cost carrier were eliminated. On the other hand, the argument is that if JetBlue joins forces with Spirit, the combined airline could be a true competitor to the “big four” US carriers in terms of scale, helping to keep fares down.

JetBlue and Spirit are hoping to close the transaction by the first half of 2024, though it’s anyone’s guess how this will all play out. In the event that the proposed agreement is not consummated for antitrust reasons, JetBlue will pay Spirit a reverse break-up fee of $70 million, and shareholders of Spirit a reverse break-up fee of $400 million, minus any amounts paid to shareholders of Spirit prior to termination.

As much as I enjoy the JetBlue passenger experience, the airline has been a mess operationally over the past couple of years, and hasn’t exactly been doing well financially. I just don’t see how this is going to end well. Even if this does get approved, JetBlue is way overpaying for Spirit, not to mention the airlines would likely have to make significant concessions to regulators.

I don’t see this ending well for JetBlue

Bottom line

Spirit shareholders have approved JetBlue’s takeover bid. Now the two airlines have to go through the regulatory process, which they’re hoping to wrap up by 2024. It’s anyone’s guess if this is successful, though the two airlines sure have an uphill battle.

How do you see the JetBlue and Spirit merger playing out?

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  1. Icarus Guest

    Spirit Mint business class to London

  2. Mantis Guest

    Bye JetBlue, was nice knowing you.

  3. Gravelly Point Guy Guest

    There goes the Northeast Alliance you guys.

  4. George Romey Guest

    Personally I think the ULCC have ruined this industry. People love ULCCs until one day things go wrong. Then they wonder why they've been sleeping in the airport for 3 days and there doesn't seem to be any open seats or enough customer service reps to help them. Or why they're stuck in a middle of seat between 2 passengers that weight 400 pounds each.

    It's probably going to be far easier to turn an...

    Personally I think the ULCC have ruined this industry. People love ULCCs until one day things go wrong. Then they wonder why they've been sleeping in the airport for 3 days and there doesn't seem to be any open seats or enough customer service reps to help them. Or why they're stuck in a middle of seat between 2 passengers that weight 400 pounds each.

    It's probably going to be far easier to turn an ULCC into a LCC other than the other way around. Now whether that will be profitable is another question.

    1. ConcordeBoy Diamond

      Odd that you're implying that such maladies are somehow endemic to ULCCs... when we see all the above in the Big3+WN whenever the temp drops to freezing in Atlanta, or Texas thunderstorms stick around for more than a day.

      The truth of the matter is that ULCCs have allowed more people to fly to more places, often from alternative gateways at that.

      You think the likes of LHR/LGW and AMS are clusterf*cks NOW? ...let even...

      Odd that you're implying that such maladies are somehow endemic to ULCCs... when we see all the above in the Big3+WN whenever the temp drops to freezing in Atlanta, or Texas thunderstorms stick around for more than a day.

      The truth of the matter is that ULCCs have allowed more people to fly to more places, often from alternative gateways at that.

      You think the likes of LHR/LGW and AMS are clusterf*cks NOW? ...let even a large fraction of the people who've instead been taking nonstops out of LTN/STN, go back to using them instead.

    2. John Guest

      ConcordianGirl CALM DOWN! Why be nasty to everyone, You could be the target VERY soon. Just saying....

  5. DENDAVE Member

    Such odd bedfellows. I can only guess/hope(?) Jet Blue will absorb them for their planes, staff, and gates. From what I've heard from Jet Blue staff, they've struggled to grow through normal means and this is an asset purchase more than anything. If it goes through, hopefully, that opens up space for a newer ULCC to grow and compete with Frontier. Maybe they'll even have a Big Front Seat equivalent :).

    1. Bill Guest

      There is no need to guess. B6 already announced from the very beginning that the NK inflight product is going away and new deliveries will all be taken in B6 configurations.

    2. Brian Guest

      Even the worst seat on jetblue is better than any seat on spirit. Jetblue mint product is very successful and is a product that competes with and exceeds any first class domestic product. I personally think the spirit product is trash and the nickel and dime pay for everything model is bad for consumers. I’ve seen spirit treat their customers horribly.

    3. ConcordeBoy Diamond

      "I personally think the spirit product is trash and the nickel and dime pay for everything model is bad for consumers."

      You may well think that, and in all fairness, you've probably heard many others whine in similar fashion...

      ...but wallets speak louder than words, and the numbers (not to mention consistent history) don't lie:
      the airlines who've taken the a-la-carte ULCC model tend to be profitable and growing, whereas those who've attempted to...

      "I personally think the spirit product is trash and the nickel and dime pay for everything model is bad for consumers."

      You may well think that, and in all fairness, you've probably heard many others whine in similar fashion...

      ...but wallets speak louder than words, and the numbers (not to mention consistent history) don't lie:
      the airlines who've taken the a-la-carte ULCC model tend to be profitable and growing, whereas those who've attempted to provide "luxury" to the everyday economy passenger, are either struggling (JetBlue), or dead as the Dodo bird.

      I mean, how are Virgin America, MidWest Express, Legend, etc doing nowadays?

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Gravelly Point Guy Guest

There goes the Northeast Alliance you guys.

2
George Romey Guest

Personally I think the ULCC have ruined this industry. People love ULCCs until one day things go wrong. Then they wonder why they've been sleeping in the airport for 3 days and there doesn't seem to be any open seats or enough customer service reps to help them. Or why they're stuck in a middle of seat between 2 passengers that weight 400 pounds each. It's probably going to be far easier to turn an ULCC into a LCC other than the other way around. Now whether that will be profitable is another question.

1
John Guest

ConcordianGirl CALM DOWN! Why be nasty to everyone, You could be the target VERY soon. Just saying....

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