JetBlue and Spirit Airlines have officially called off their merger, about six weeks after a federal judge ruled that it violated US antitrust law, AFP reports.
The companies presented JetBlue's $3.8 billion purchase of Spirit as a bargain for consumers, but in January a federal judge sided with the US Justice Department, which argued that eliminating Spirit's no-frills airline would lead to higher ticket prices.
The companies made their decision after concluding that, given the legal situation, they were unlikely to meet the merger's July 24, 2024 deadline.
JetBlue will pay Spirit $69 million in termination fees.
"We believed this merger was worth it because it would have unleashed a national low-cost, high-value competitor to the Big Four airlines," said JetBlue CEO Joanna Geraghty.
"Given the hurdles that remain before closing, we collectively decided that the interests of both airlines are better protected if they move forward independently."
In a statement, U.S. Attorney General Merrick Garland called JetBlue's decision "another victory for the Justice Department's work on behalf of American consumers."
"We will continue to vigorously enforce the nation's antitrust laws," he added.
Spirit's shares plunged 14.5 percent in early trading on March 4, while JetBlue rose 3.9 percent.
Spirit remains confident "in its future as a successful independent airline," Chief Executive Ted Christie said.
"After discussing our options with our advisors and JetBlue, we have concluded that current regulatory hurdles will not allow us to close this transaction in a timely manner under the merger agreement. We are disappointed that we cannot move forward with the transaction that would save consumers hundreds of millions," he said.
Spirit said it has sought advisers for its refinancing efforts and to reduce debt payments. / BGNES
