JetBlue has agreed to buy Spirit Airlines for $3.8 billion in a deal that would create the nation’s fifth-largest airline if approved by U.S. regulators.
The agreement Thursday comes a day after Spirit’s attempt to merge with Frontier Airlines fell apart. Spirit had recommended its shareholders approve a lower offer from Frontier, saying antitrust regulators are more likely to reject the bid from JetBlue.
JetBlue said Thursday that it would pay $33.50 a share in cash for Spirit, including a prepayment of $2.50 a share in cash payable once Spirit stockholders approve the transaction. There’s also a ticking fee of 10 cents a month starting in January 2023 through closing.
The combined airline would have a fleet of 458 aircraft. The airlines will continue to operate independently until after the transaction closes.
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“As you can imagine, combining two airlines takes time and we still have a lot more work to do behind the scenes. After close, the combined airline will operate under the JetBlue brand. Eventually, all Spirit aircraft will be converted to JetBlue, but for now nothing is changing – we remain two independent airlines until the transaction closes,” JetBlue CEO Robin Hayes said in an email to customers. “Any tickets you’ve purchased on either JetBlue or Spirit are still valid, and all your points and benefits stay exactly the same. We will keep you posted as we have additional details to share.”
A merger with JetBlue is going to be a big change for Spirit’s passengers. JetBlue competes more directly with legacy full-service carriers than the ultra-low-cost airline it plans to buy. That could mean higher fares in some markets.
The combination of cultures and fleets will also take significant time and could have some serious pain points over the coming years. Though JetBlue and Spirit fly similar airplanes, they are configured very differently, and it will take time to reconfigure Spirit’s aircraft to JetBlue’s standards.
The inflight service flow on the two airlines also is different, and Spirit’s staff probably will need to be retrained on JetBlue’s practices.
Contributing: Associated Press
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