Spirit Airlines receives a massive flight deal from Jetblue

Spirit Airlines receives a massive flight deal from Jetblue ...

An engagement period before a wedding is a factor.

Both parties have the opportunity to make sure that a life-long commitment is what they desire.

While JetBlue (JBLU) - Get JetBlue Airways Corporation Reportand Spirit Airlines (SAVE) - Get Spirit Airlines, Inc. Reportwere never officially betrothed, in April, Spirit agreed to discuss JetBlue''s $3.6 billion takeover offer.

At the time, Spirit was planning a $6.6 billion collaboration with Frontier Group (ULCC) - Get Frontier Group Holdings, Inc. Report. However, JetBlue''s offer at the time constituted a 33% premium to the agreement, implying that Spirit had a fiduciary duty to its shareholders.

Spirit gave JetBlue back its engagement ring on Monday, rejecting an enhanced proposal that would have allowed JetBlue to lose assets to get regulatory approval and to pay a $200 million breakup fee, representing $1.80 per share, if the acquisition didn''t close for regulatory reasons.

Spirit maintains that despite its promise to divest assets and its promise of a nine-figure settlement if regulators block the transaction, it will not pass regulatory muster and is going ahead with its desire to marry Frontier.

JetBlue Wants to Hold Onto the NEA

Spirit and Frontier agreed to a merger on February 7 before JetBlue made its unolicited offer; now, unless JetBlue sweetens the pot again, they''re looking to go to a merger.

"After a thorough review and a strong conversation with JetBlue, the board determined that the JetBlue proposal would involve a high level of closing danger that would be assumed by Spirit stockholders," said Mac Gardner, chairman of Spirit''s board.

"We believe that a combination of JetBlue and Spirit has a very low probability of getting antitrust clearance, as long as JetBlue''s Northeast Alliance (NEA) with American Airlines remains in existence."

The NEA began scheduling flights at Boston''s Logan Airport, New York''s JFK, LaGuardia airports, and New Jersey''s Newark International airport in February 2021.

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According to the Center for Aviation, the majority of JetBlue''s intention to increase capacity in 2022 is tied to the National Aeronautical Agency.

In September, the US Department of Justice launched a legal challenge against the alliance, claiming that the partnership between Boston and New York would result in less competition in those areas.

This is one of Spirit''s main sticking points for choosing Frontier.

"As you know, Spirit and other airline and air travel organizations have publicly opposed the NEA because to its anticompetitive nature. We are difficult to comprehend how JetBlue can believe that the DOJ or a court will be persuaded that JetBlue should establish a protracted alliance that aligns its interests with a legacy carrier, then undertake an acquisition that will eliminate the largest ULCC carrier," Spirit executives said Monday.

JetBlue Isn''''t Willing to Let Go of the NEA

Spirit claims that when it agreed to continue negotiations with JetBlue in April, some of the discussions stated that JetBlue would have to cancel the National Energy Agency''s closing session.

In JetBlue''s updated proposal Monday, the company said it strongly believes the NEA will be permitted to continue because "the alliance is providing customer benefits promised," and that it is not a factor in its proposal.

"We shouldn''t have to choose between a low price and a great experience," JetBlue CEO Robin Hayes said. Both the NEA and the Spirit transaction are strategic initiatives that will accelerate our current growth strategy and bring the JetBlue Effect to more customers in the Northeast, Florida, and across the country.

In the metro areas that are served by both, JetBlue claims to have significantly less overlap with Spirit in terms of flights, seats, and seat miles.

JetBlue claims it only diverts with Spirit on 48 nonstop routes, compared to Spirit and Frontier''s in 76 nonstop routes.

If JetBlue does not want to abandon the NEA, it will have a tough time convincing Spirit that its suggestion is the one to go with.

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