Spirit Airlines on Monday rejected an offer to acquire JetBlue Airways, saying the proposal was unlikely to be approved by regulators.
In a letter to JetBlue, Spirit executives said they have determined that JetBlue’s acquisition offer is unlikely to be approved until the airline’s recently announced partnership with American Airlines is in place. vigor. Recent communication from JetBlue “makes it clear” that the airline is unwilling to end this partnership, known as the Northeast Alliance, Spirit said in the letter. The Justice Department and several states have sued to block the JetBlue-US partnership, arguing it is anti-competitive.
In a statement, Spirit board chairman Mac Gardner said the company is sticking to its plan to merge with Frontier Airlines, an agreement that predates JetBlue’s bid and which Spirit says represents the best interests. long-term shareholders.
“After careful consideration and extensive dialogue with JetBlue, the Board of Directors has determined that JetBlue’s proposal involves an unacceptable level of closing risk that would be borne by Spirit shareholders,” Mr. Gardner said. “We believe our impending merger with Frontier will open an exciting new chapter for Spirit and provide many benefits for Spirit shareholders, team members and guests. »
Spirit and Frontier, two low-cost airlines, announced plans to merge in February. Then JetBlue stepped in with a larger offer for Spirit last month. Both deals would come under scrutiny from regulators in the Biden administration, who have expressed more skepticism of the consolidation than their predecessors.
Some analysts say Spirit and Frontier are better suited to merge because they operate under a similar “ultra low-cost” business model but have more extensive flights in different parts of the United States. A JetBlue-Spirit combination might be harder to pull off as the airlines’ business models are quite different. But the deal could allow JetBlue to compete more effectively with the country’s four dominant airlines.
Spirit said regulators would likely be “very concerned” about the prospect that JetBlue’s bid would lead to higher costs, and subsequently higher fares, for consumers. For example, Spirit said converting Spirit’s planes, which are densely packed with seats, to JetBlue’s roomier configuration would result in higher prices.
In its Monday response, JetBlue said it would offer to divest Spirit’s assets in New York and Boston, two markets that are worrying regulators in their lawsuit to bring down the Northeast Alliance. JetBlue also argued that its offer and the deal with Frontier shared “a similar regulatory profile,” but that Frontier did not offer to divest any assets or pay a break fee. JetBlue also said the value of Frontier’s cash and stock deal has faded as the airline’s stock price plummeted.
“Spirit shareholders would be better off with the certainty of our substantial cash bonus, regulatory commitments and break fee protection,” JetBlue Chief Executive Robin Hayes said in a statement Monday.
JetBlue has accused Spirit of failing to grant it sufficient access to data on the low-cost carrier’s activity while demanding “unprecedented commitments” from JetBlue.
The post Latest Economic, Inflation and Business News: Live Updates appeared first on Les Actualites.