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Bloomberg
Spirit Airlines Inc shareholders approved the carrier’s $3.8 billion cash sale to JetBlue Airways Corp, a milestone for a deal that’s poised to eliminate the largest US carrier offering deeply discounted fares.
More than half of outstanding shares were voted in favour of the combination, according to preliminary results disclosed by the companies. JetBlue and Spirit still expect to receive required regulatory approvals and close the transaction no later than the first half of 2024, they said in a statement.
The vote adds momentum to the most contentious airline takeover battle in the US in
recent years, with JetBlue’s stubborn pursuit of Spirit overcoming a separate proposal by Frontier Group Holdings Inc. After agreeing earlier this year to a merger, Spirit and Frontier called it off in July as JetBlue sweetened its own bid.
The deal now rests on whether Spirit and JetBlue can secure federal antitrust approval — a far bigger hurdle given the anti-consolidation stance taken by the Biden administration. They’ll need to convince the Justice Department that merged airline won’t have enough market concentration in some cities to give it an unfair pricing and competitive advantage.
“This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant US carriers,†Spirit Chief Executive Officer Ted Christie said in the statement.
JetBlue already has offered to shed Spirit assets in Boston, New York and some parts of Florida to help secure federal support.
Still, the deal would eliminate Spirit as the largest deep fare discounter, a term for airlines that offer bare-bones fares and charge for anything else, like $10 for a printed boarding pass or $3.50 for coffee or a bottle of water during flights. That change in the industry might not sit well with DOJ attorneys.
JetBlue is counting on the combination to provide an influx of aircraft and pilots, both currently in short supply, and to expand its network, making it the fifth-largest US carrier based on domestic passenger traffic. The airline hopes to lure passengers away from larger competitors with lower fares and similar onboard service.
“We look forward to working through the regulatory process so that we can increase competition in the industry and bring JetBlue’s unique combination of low fares and great service to more customers across the country,†the carrier said.
JetBlue and American Airlines group Inc. currently are in federal court battling allegations from the Justice Department that their marketing alliance in the US Northeast amounts to a virtual merger and violates antitrust laws. The partnership allows the carriers to share routes, passengers and other resources primarily in New York and Boston.