JetBlue's bid for low cost carrier rejected

Spirit is set to merge with fellow ultra low-cost brand Frontier after its board threw out a $3.6 billion bid from New York-based JetBlue. Spirit, based in Florida, is instead pressing ahead with plans to former “an aggressive ultra-low fare competitor” with Frontier, which is based in Denver.

In a letter to JetBlue chief executive Robin Hayes, Spirit said the proposed deal would be unlikely to receive approval by US regulators “so long as JetBlue’s Northeast Alliance with American Airlines remains in existence”. 

The letter also predicted regulators would block the deal because it amounted to a “an acquisition that will eliminate the largest ultra low-cost carrier”. The deal, it said, would remove about half the capacity in this section of the market across the US.

The letter describes the bid as “illusory” and said the board “has not found it necessary to consider it”. 

Spirit said: “The Company will continue to advance toward completing the transaction with Frontier, which is expected to close in the second half of 2022.”

Spirit’s board may however find resistance from some investors, as the offer from JetBlue represented a 50% premium to Spirit’s share price.