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BLOOMBERG
JetBlue Airways Corp agreed to sell Spirit Airlines Inc’s operations at New York’s LaGuardia Airport to rival carrier Frontier Group Holdings Inc.
The deal is contingent upon JetBlue closing a planned $3.8 billion acquisition of Spirit, according to a statement. JetBlue had earlier pledged to divest some assets to help secure federal approval of the acquisition, which has been challenged by the US Justice Department over concerns it would hurt consumers and reduce industry competition.
Spirit’s holdings at LaGuardia include six gates and 22 takeoff and landing slots. JetBlue also agreed previously to give up some Spirit assets in Boston and Florida.
JetBlue is offering concessions because of the overlap of its operations and Spirit’s in certain markets. A combination of the carriers is the only way it can gain the size and heft to compete with the nation’s three largest airlines that control about 80% of the market, JetBlue has argued.
JetBlue and Spirit shares each rose less than 1% after regular trading in New York, while Frontier was unchanged.