We were barely getting used to the thought of low-cost giants Frontier Airlines and Spirit Airlines merging to create 1 giant low-cost carrier, but now JetBlue has stepped in to shake things up even further.
Earlier this week, New York-based JetBlue Airways submitted a proposal to the board of directors at Spirit Airlines to purchase the Fort Lauderdale-based airline.
“Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue has shown it’s possible to have both,” said Robin Hayes, CEO of JetBlue.
Here’s what you need to know about JetBlue’s potential takeover of Spirit Airlines and what it could mean for the Frontier/Spirit merger.
JetBlue Bids for Spirit Airlines
It was only in February that Frontier and Spirit announced they intended to merge, with that deal expected to be finalized in the second half of 2022.
JetBlue has offered $3.6 billion for Spirit, which works out to roughly $33 per share. According to a press release from JetBlue, this represents a premium of 52% over Spirit’s “undisturbed” share price on February 4, 2022, and a premium of 50% over Spirit’s closing price on April 4, 2022.
If the deal were to go through, it would result in JetBlue owning a controlling stake in Spirit Airlines. JetBlue hopes the deal will build upon the still-new Northeast Alliance it has formed with American Airlines and take JetBlue and its passengers to new heights.
Hot Tip: The Northeast Alliance between American Airlines and JetBlue provides flyers with reciprocal earning and redeeming options on each carrier.
Image Credit: Daniel RossJetBlue hopes this potential merger would disrupt the U.S. domestic market, which is currently dominated by 4 large airlines: American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines.
“The combination of JetBlue and Spirit — coupled with the incredible benefits of our Northeast Alliance with American Airlines — would be a game-changer in our ability to deliver superior value on a national scale to customers, crewmembers, communities, and shareholders,” said Hayes.
A Super-Hub in Florida?
Both JetBlue and Spirit have longstanding connections with Florida. JetBlue’s first-ever revenue flight to Florida was over 20 years ago between New York (JFK) and Fort Lauderdale (FLL) — the same city in which Spirit’s headquarters are located.
The combined airline would make Florida — and the greater East Coast — the center of an expansive route network connecting over 130 destinations across South and Central America, the Caribbean, the U.K., and, of course, the U.S.
JetBlue’s takeover of Spirit would mean the airline would pick up new destinations that it doesn’t serve currently including Atlantic City (ACY), Louisville (SDF), Memphis (MEM), Myrtle Beach (MYR), St. Louis (STL), and 4 new destinations in Colombia.
A Spirit Airlines Airbus A320 at Cartagena Airport (CTG). Image Credit: Daniel RossWhat About Frontier?
The jury’s out on this one. Until now, it looked like the Frontier/Spirit merger was a done deal.
However, JetBlue’s entry into the competition for Spirit has upended the equation, and time will tell whether Spirit decides to go with its ultra-low-cost peer Frontier or the higher-end JetBlue as its partner.
According to Spirit, JetBlue’s bid came completely out of the blue (pun intended), so it could take some time for Spirit’s decision-makers come to a decision.
Final Thoughts
JetBlue is attempting to thwart the Frontier/Spirit merger by bidding to take over the bright-yellow carrier instead.
Whichever route Spirit decides to choose, a potential merger with either Frontier or JetBlue would undoubtedly shake up the U.S. domestic market.
This is a developing story — we’ll be sure to update you as soon as we learn more.
Featured Image Credit:
Daniel Ross
