(CMR) JetBlue Airways has agreed to buy Spirit Airlines for $3.8 billion, a deal that would create the fifth-largest airline in the United States. This agreement comes after Spirit's attempt to merge with fellow budget carrier Frontier Airlines fell apart.
Spirit CEO Ted Christie has to defend the sale to JetBlue after arguing previously against it, saying that antitrust regulators would never let it happen.
“A lot has been said over the last few months, obviously, always with our stakeholders in mind. We have been listening to the folks at JetBlue, and they have a lot of good thoughts on their plans for that,” Christie told the media.
JetBlue CEO Robin Hayes has argued all along that a larger JetBlue would create more competition for the four airlines that control about 80% of the U.S. market — American, United, Delta, and Southwest.
Shares of Spirit, based in Miramar, Florida, rose 3.5% at the opening bell Thursday, to $25.15, still below the price that JetBlue is offering, while JetBlue shares were essentially flat.
If approved, the deal is expected to close in the first half of 2024. JetBlue and Spirit will continue to operate independently until the agreement is approved by regulators and Spirit shareholders, with their separate loyalty programs and customer accounts, NPR reported.
If the takeover happens, the combined airline would be based in JetBlue's hometown of New York and led by Hayes. It would have a fleet of 458 planes.