Proposal threatens Frontier’s bid for Spirit
Trying to block a merger between budget airlines Spirit and Frontier, JetBlue has swooped in with an unsolicited bid to buy Spirit. JetBlue’s offer is for $3.6 billion, significantly more than the stock-and-cash deal Frontier worked out to purchase Spirit. Combined, those airlines would surpass JetBlue as the fifth-largest carrier in the U.S. Acquiring Spirit, JetBlue said, would put it in a position to challenge American, United, Delta, and Southwest, which combine to carry more than 80% of the nation’s air passengers.
“The combination of the two airlines would position JetBlue as the most compelling national low-fare challenger to the four large dominant US carriers by accelerating JetBlue’s growth,” JetBlue said in a statement.
Spirit announced it is evaluating JetBlue’s proposal and would make a decision based on what’s best for the airline and its shareholders.
Frontier defended its $2.9 billion offer as better for stakeholders given its and Spirit’s common history as barebones low-fare carriers.
“A combined Spirit and Frontier will deliver $1 billion in annual savings for consumers and offer even more ultra-low fares to more places nationwide, creating America’s most competitive ultra-low fare airline,” Frontier said, adding that “shareholders with substantial upside potential for the combined company as a result of the merger synergies.”
Spirit and Frontier have the worst customer satisfaction ratings and highest complaint rates among U.S. airlines. JetBlue tied for third-best in the 2021 satisfaction rankings.
“Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue has shown it’s possible to have both,” JetBlue CEO Robin Hayes said.
The Biden administration has taken a dim view of airline mergers, suing to block an alliance between JetBlue and American on East Coast flights. Should Spirit accept JetBlue’s offer and the deal go through, it would give JetBlue its first international routes, as Spirit serves several destinations in the Caribbean and Latin America.
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