A Frontier Airlines plane passes a Spirit Airlines plane at Indianapolis International Airport in Indianapolis, Indiana, Monday, Feb. 7, 2022.
Luke Sharrett | Bloomberg | Getty Images
Spirit Airlines on Wednesday terminated its merger agreement with Frontier Airlines, months after rival JetBlue Airways’ all-cash offer scuppered the planned tie-up.
On Wednesday, shareholders were to vote only on the Spirit-Frontier combination, not a takeover of JetBlue, even though the New York-based airline spent weeks urging shareholders to reject the deal.
Frontier’s CEO and others familiar with the matter have said Spirit did not have shareholder support for the Frontier combination.
Spirit said it would continue its “ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our shareholders.”
A JetBlue takeover of Spirit or a Spirit-Frontier combination would create the nation’s fifth-largest carrier. The termination of the Frontier deal is a blow to the discount carriers that planned to combine forces on a big budget.
Spirit had postponed the shareholder vote four times as it struggled to garner enough shareholder support. In a July 10 letter to his Spirit counterpart, Frontier CEO Barry Biffle called its latest sweetened offer the “best and final” and said: “We are still a long way from getting the approval of Spirit’s stockholders.”
The completion of the Spirit-Frontier deal makes it easier to reach an acquisition deal with JetBlue, which is looking to buy the budget airline for about $3.7 billion and refurbish its jets in the JetBlue style. with backrest screens and legroom. Ongoing talks for a JetBlue takeover could still fall apart.
“While we are disappointed that Spirit Airlines shareholders have not recognized the value and consumption potential inherent in our proposed combination, the Frontier Board took a disciplined approach throughout its negotiations with Spirit,” said William Franke, chairman of the board and director of Frontier. partner of Indigo Partners, majority shareholder of Frontier in a statement.
Spirit’s has repeatedly rejected increasingly sweetened offers from JetBlue, arguing that regulators were unlikely to approve the acquisition.
No deal may be made. Both transactions faced a major obstacle to the Justice Department’s blessing because the Biden administration has vowed to crack down on consolidation.
Executives at the three airlines said their preferred deal would help them better compete with the four major U.S. carriers — American, Delta, United and Southwest — which control roughly three-quarters of the domestic market.
Spirit, however, has raised concerns about the JetBlue takeover because of that airline’s alliance with American in the Northeast, a partnership the Justice Department sued last year to undo.
Frontier Airlines plans to report results on Wednesday, when it will likely discuss the terms of the termination.