JetBlue Airways and Spirit Airlines on Monday said they are ending their agreement to merge, weeks after losing a federal antitrust lawsuit that challenged the deal.
The CEOs of the two carriers cited regulatory hurdles in ending their merger agreement.
A federal judge in January sided with the Justice Department and blocked JetBlue’s attempted takeover of budget carrier Spirit. In his ruling, Judge William Young said JetBlue’s takeover of Spirit would “harm cost-conscious travelers who rely on Spirit’s low fares.” The airlines had argued that they needed to combine to better compete with the larger airlines that control most of the U.S. market.
JetBlue and Spirit had appealed the judge’s decision, but JetBlue noted the appeal was required under the terms of the merger agreement. Analysts had expected little chance of a successful appeal.
The Justice Department cheered the news on Monday, a year after it filed its suit to block the deal. “Today’s decision by JetBlue is yet another victory for the Justice Department’s work on behalf of American consumers,” Attorney General Merrick Garland said in a statement.
Spirit’s shares tumbled almost 11% on Monday to end the trading session at their lowest closing price on record, $5.76 per share, while JetBlue’s stock closed more than 4% higher at $6.75.
Almost two years ago, JetBlue swooped in with an unsolicited bid for Spirit Airlines, which had weeks earlier struck a merger agreement with fellow budget airline Frontier. JetBlue ultimately won Spirit shareholder approval to take over the discount carrier.
“It was a bold and courageous plan intended to shake up the industry status quo, and we were right to compete with Frontier and go for an opportunity that would have supercharged our growth and provided more opportunities for crewmembers,” JetBlue CEO Joanna Geraghty said in a note to staff on Monday.
“However, with the ruling from the federal court and the Department of Justice’s continued opposition, the probability of…
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