Spirit Airlines shareholders voted to approve a $3.8 billion merger proposal with JetBlue. If approved by regulators, it will create the fifth-largest airline in the U.S.
The outcome of the vote seemed likely after Spirit’s attempt to merge with Frontier Airlines fell apart this summer. Spirit’s board had favored joining forces with the rival discounter. At the time, the board said antitrust regulators were more likely to reject the bid from JetBlue, but the airline’s executives now say they expect to receive regulatory approval and close the deal by the first half of 2024.
“We believe we can uniquely be a solution to the lack of competition in the U.S. airline industry and the continued dominance of the Big Four,” JetBlue’s CEO Robin Hayes said in a statement over the summer. “By enabling JetBlue to grow faster, we can go head-to-head with the legacies in more places to lower fares and improve service for everyone. Even combined with Spirit, JetBlue will still be significantly smaller than the Big Four, but we’ll be much better positioned to bring the proven JetBlue Effect to many more routes and locations.”
JetBlue plans to 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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What would a Spirit-JetBlue merger mean for travelers?
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