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Probably divest most of its gates at Charlotte, but would that have been useful? Spirit Airlines, whose shareholders approved the merger with JetBlue in October 2022, expects the Department of Justice (DOJ) to decide whether to allow the airline to proceed with the merger in the next 30 days. Customers throughout the United States will benefit from an independent spirit. Disney greased the politicians with millions of dollars, this is how business works. I believe the legal footing for the DOJ's argument is rather weak. Barclays and Morgan Stanley & Co. LLC are serving as financial advisors to Spirit, and Debevoise & Plimpton LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors. Further, the judge assigned to the case is likely to have different views than DOJ. I feel like the on-time/delay/cancellation rate is always so much worse with them, even if thats just an anecdotal feeling when flying with them. Spirit Airlines and Frontier Airlines agreed to walk away from a proposed merger today without announcing the results of a planned shareholder vote, months after JetBlue . In a parallel merger, two competing and overlapping entities combine with the idea to eliminate or reduce duplication and rationalize the combined entity. JetBlue + Spirit | The Best of Both Airlines "I'm perfectly prepared to handle the matter and look forward to it," Young said. I wrote this article myself, and it expresses my own opinions. The judicial branch is an actor that is independent of the political aspects of the executive and legislative branches; however, judges appointed by the president will often have similar ideologies to the president who appointed them. "JetBlue's unique combination of low fares and great service is a competitive force that keeps the legacy carriers on their toes and results in lower fares," the company said. What JetBlue Told Employees About Merger With Spirit Airlines, JetBlue is retreating from markets this summer, Premium Economy Cutbacks At United Airlines Demonstrate Tension Between Push For Quality And Cost Controls, Scary: Air France Pilots Report 777-300ER Did Not React To Commands, Veered Left On Final Approach (ATC Audio), Hotel Workers Want Taylor Swift To Stay Out Of Los Angeles, Wi-Fi Prices On SWISS Finally Come Down To Earth, United Airlines Captain Busted In Paris For Intoxication, Capital One Venture X Rewards Credit Card, Chase Ink Business Unlimited Credit Card, The Business Platinum Card from American Express, Flying United The Next Two Days? Thats a very desirable situation to have, to be able to increase capacity utilization beyond breakeven. The combined airline would fly under the JetBlue brand and be based in New York City. First, DOJ suggests two major reasons why two firms should not merge, but I believe the legal standing on the matter is fairly weak. JetBlue will pay $33.50 per share, which is an equity value of $3.8 billion. JetBlue offered about $3.7 billion for Spirit, agreeing to pay all cash for its shares, while Frontier had proposed a cash and stock deal valued at about $1 billion less than the JetBlue offer. Some investors have pointed out the newly found risk as a result of the DOJ's, Department of Justice, action; however, I view the matter differently. Tel: +1.718.709.3089 In anticipation of a DOJ lawsuit, JetBlue said a merger with Spirit would bring down costs for customers. I am not receiving compensation for it (other than from Seeking Alpha). JetBlue Announces Record and Payment Dates for May 2023 Additional These statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. It said the deal was "presumptively illegal" and that JetBlue planned to remove 10% to 15% of seats from every Spirit plane. JetBlue Spirit merger: New offer could spoil Frontier-Spirit merger Thats not to say we cant learn from Spirit and incorporate things they do well into JetBlue. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed, or assured. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Spirit Airlines shareholders approved a takeover of JetBlue Airways on Wednesday, a merger that could create the fifth largest carrier . JetBlue has just provided the rationale for the merger to its employees. What a JetBlue and Spirit Airlines merger would mean in WNY Spirit Announces Stockholder Approval of Merger Agreement with JetBlue. In the lawsuit filed in Massachusetts federal court, the Justice Department said that allowing the merger to go through would eliminate Spirit as the "the largest and fastest-growing ultra-low-cost carrier in the United States.". However, when you dig deeper, youll realize we could be a perfect match. These statements are intended to qualify for the "safe harbor" from liability established by the Private Securities Litigation Reform Act of 1995. This is like Nordstrom buying Dollar Store. If JetBlue cant acquire Spirit, itll at least drive up Frontiers cost and make it harder for the combined entity to compete. JetBlue won the battle for Spirit. Now it has to win over Biden's JetBlue Airways finally won over Spirit Airlines with a $3.8 billion takeover deal. While Im not convinced this is remotely logical and dont think this merger will pass regulatory scrutiny, it is a gutsy move by JetBlue. Spirit Airlines Shareholders Back Sale to JetBlue Turn on desktop notifications for breaking stories about interest? How can JetBlue or any airline think that adding a horrible airline to their business is going to make them better? But JetBlue will have to be careful because if they want to get approval they cant go overboard with this. JetBlue said the deal would result in annual savings of $600 million to $700 million. If you have an ad-blocker enabled you may be blocked from proceeding. JetBlue - Wikipedia Has there been any news or movement on the merger? Theres going to be a lot of negotiation and probably a certain amount of divestment by JetBlue. Has JetBlues operational performance ever been good? Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Adding spoiled milk to regular milk doesnt make great milk. Is this happening to you frequently? I would argue that stopped at least 5yrs ago and since then leadership are doing their utmost to run it into the ground. (IFE, mood lighting, power, extra legroom). The acquisition would accelerate JetBlues growth with 1,700 flights to more than 125 destinations in 30 countries, based on December 2022 schedules. If the deal doesn't close due to antitrust reasons, JetBlue will pay Spirit a reverse break-up fee of $70 million and pay Spirit shareholders $400 million, minus any amounts paid to the shareholders prior to termination. Keeping the economy open to all Americans, regardless of income status is a priority across the department.". Please disable your ad-blocker and refresh. Any outlook or forecasts in this press release have been prepared without taking into account or consideration the Merger with Spirit. In 2022, JetBlue ( NASDAQ: JBLU) and Spirit Airlines ( NYSE: SAVE) announced a merger. Judge sets October trial in US challenge to JetBlue's Spirit deal If including Southwest, the four biggest players have a market share of about 67.2%. dumbed down to COs way of doing things hasnt been United since (2013). The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to Team Members, Guests and stockholders.". Spirit and Frontier are both low-cost airlines. They will have to decide whether to have a lower-cost airline and slightly higher-cost flying to the same destination. Spirit Airlines regularly ends up as the worst, or close to the worst, when airlines are ranked by the rate of consumer complaints. Additional Important Information and Where to Find ItThis communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. But it would get much closer. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Spirit Announces Stockholder Approval of Merger Agreement with JetBlue The agreement Thursday. "Spirit's strategy of focusing on cost-conscious travelers has prompted other airlines to follow suit by introducing their own fare options to better compete," the suit says. I will not go into the details of the merger as it has already been covered extensively in the Seeking Alpha community, but Spirit Airlines will be the biggest beneficiary if the deal goes through. About SpiritSpirit Airlines (NYSE: SAVE) is committed to delivering the best value in the sky. The merger may hurt the ultra-low-cost consumers, but they only account for less than 10% of the market. Save my name, email, and website in this browser for the next time I comment. If anything, this puts pressure on Alaska to consider purchasing Frontier for the adjacent routes. Flying on Spirit is so unpleasant it makes a Greyhound bus seen luxurious. Money laundering. Investors and stockholders are able to obtain free copies of the proxy statement and other documents filed with the SEC by JetBlue and Spirit through the website maintained by the SEC at www.sec.gov. Frontier will continue to say to everyone, Were the only low-cost option available. So if theres a recession on the horizon, people will look to save money. Spirit has recognized it has "no obligation" to "follow the herd" when it comes to collective industry price increases. Its an interesting question for consumers. However, in March of 2023, the United States Department of Justice sued in an attempt to block the. Spirit had been talking for months with Frontier about a deal. A merger with JetBlue is going to be a big change for Spirit's passengers. ", 24/7 coverage of breaking news and live events. The combined airline would have a fleet of 458 aircraft and an order book of more than 300 Airbus aircraft with fuel-efficient, lower-carbon new engine option (NEO) engines. and that was United and Continental can you just imagine these two (Spirit and Jet Blue) together? It may be that most of the public like a slightly better service and I think JetBlue may offer that, but most likely it will be at a slightly higher average cost fare than what Spirit was offering. We have made an offer to buy Spirit and merge them into JetBlue. This allows our Guests to pay only for the options they choose like bags, seat assignments and refreshments something we call La Smarte. But given the limited network at that point with Virgin it seems as if Alaska just could have expanded on their own for far less in costs to buy and integrate. document.write(new Date().getFullYear()) Live and Let's Fly All Rights Reserved.Unauthorized use and/or duplication of this material without express and written permission from this sites author and/or owner is strictly prohibited. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED BY JETBLUE OR SPIRIT WITH THE SEC IN THEIR ENTIRETY CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT JETBLUE, SPIRIT, THE PROPOSED TRANSACTION AND RELATED MATTERS. I believe that it is more likely for the deal to go through than to be blocked by DOJ for a few reasons. Come save with us at spirit.com. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. Frontier-Spirit merger promises better deals and service; critics aren't so sure, announced their plan to merge in February. Because both Spirit and Frontier were low-cost carriers. "Indeed, under federal antitrust law, the transaction is presumptively illegal on more than 150 routes and markets were JetBlue and spirit fly today. Frontier Airlines is offering 1 million seats for $19 one-way in a "blockbuster . Our Fit Fleet is one of the youngest and most fuel-efficient in the U.S. We serve destinations throughout the U.S., Latin America and the Caribbean and are dedicated to giving back and improving those communities. 2:26. The F.T.C. In a letter to employees obtained by Live and Let's Fly, JetBlue has outlined seven reasons for its proposed merger with Spirit Airlines. The completion of the transaction is subject to customary closing conditions, including receipt of required regulatory approvals. So if they merged they probably would have kept fares on the low side, even adjusting for some reduced competition. All these arguments by the DOJ have a legal footing under Section 7 of the Clayton Act. Marcus Mainka/Shutterstock. Judge William, assigned to the case, likely has a favorable view towards corporate mergers. JetBlue and Spirit airplanes at Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Fla., May 21, 2022. MIRAMAR, Fla., Oct. 19, 2022 /PRNewswire/ -- Spirit Airlines, Inc. ("Spirit" or the "Company") (NYSE:SAVE) today announced that its stockholders approved the merger agreement with JetBlue Airways Corporation ("JetBlue") (NASDAQ: JBLU). Its just not enough to just be good and good enough. I dont think the merger will face much resistance from regulators as the parties are too small to move the market. Once you reach breakeven on a flight then all the revenues from the extra seats go right to your gross margin line. A vote on the merger was postponed four times, then cut short Wednesday when Spirit and Frontier announced they were terminating their agreement, which made a Spirit-JetBlue coupling inevitable. I am a young private investor seeking to find advice and knowledge through my journey in Seeking Alpha. Current operational performance is a mess and I feel bad for the (still decent) cabin crew. Alaska Airlines has premium cabins and flight attendants are known for being amongst the nicest in the industry, something JetBlue shares. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. ir@jetblue.com, Internet Explorer presents a security risk. This is good news in some ways for the consumer because now that the Big Four have more competition from someone thats just like them. Still, some consumer advocates worry that fares will rise if it disappears. The industry leader for online information for tax, accounting and finance professionals. Spirit-JetBlue merger takes flight after Frontier deal terminated - Axios Therefore, I believe that JetBlue and Spirit Airlines have a chance at winning the case against DOJ, which makes Spirit Airlines a buy and JetBlue Airlines a hold. Dear Crewmembers -. This merger is illegal, Vanita Gupta, third in charge at the Justice Department, said, because it violated the Clayton Act. Spirit Airline's board of directors has rejected JetBlue's bid to acquire the airline and will proceed with its existing merger agreement with Frontier, one of its ultra-low-cost competitors,. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. JetBlue offers flights to 90+ destinations with free inflight entertainment, free brand-name snacks and drinks, lots of legroom and award-winning service. 0:04. The Justice Department on Tuesday filed a lawsuit seeking to stop JetBlue Airways from buying Spirit Airlines, arguing that the $3.8 billion deal would reduce competition in a highly. Judge William was appointed by former President Ronald Raegan, whose administration was strongly in favor of mergers. We make it possible for our Guests to venture further and discover more than ever before. Pursuant to the Merger Agreement, Spirit stockholders as of the May 24, 2023, record date will be entitled to receive the May 2023 Additional Prepayment. Further information concerning these and other factors is contained in JetBlues filings with the Securities and Exchange Commission, or SEC, including but not limited to, JetBlues 2022 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. We have made an offer to buy Spirit . "We have been listening to the folks at JetBlue, and they have a lot of good thoughts on their plans for that.". Information regarding JetBlue's directors and executive officers is contained in JetBlue's definitive proxy statement, which was filed with the SEC on April 7, 2022, and in JetBlue's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 22, 2022. Do Any Airlines Still Allow Onboard Smoking? Let me define what I mean. Duh. NO THANKS. Spirit and similar rivals Frontier and Allegiant charge rock-bottom fares that appeal to the most budget-conscious leisure travelers, although they tack on more fees that can raise the cost of flying. JetBlue and Spirit undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, changed circumstances, or otherwise. In that way it might have actually made sense. JetBlue agrees to buy Spirit a day after Frontier deal falls through Shares of Spirit, based in Miramar, Florida, rose 3.5% at the opening bell Thursday, to $25.15, still below the price that JetBlue is offering. Gotta please those stockholders though right? The only difference is culturally Spirit and Frontier are closeboth low-cost airlinesso merging they might have been able to maintain that low-cost strategy. The merger would give JetBlue 9% of the market, according to a JetBlue press release, compared to 23% to 13% for airlines in the Big Four, which, in total, control 80% of the market. JetBlue shares were essentially flat. Principal Deputy Assistant Attorney General Doha Mekki of the Antitrust Division, whose division is bringing the suit said that a previous arraignment with American Airlines disqualifies JetBlue from a merger. Bottom line is that people in, say, Massachusetts, who dont travel a lot are completely baffled by Alaska Airlines. Or as to why they have Bob Marley painted on the tail of their planes. JetBlue Will Dump Alliance With American To Save Spirit Deal - Forbes "Today JetBlue has already devoted 75% of its capacity to American Airlines, which we believe comes at a harm to passengers. Joanna Geraghty Entering text into the input field will update the search result below, have pointed out the newly found risk as a result of the DOJ's, Department of Justice, action; however, I view the matter differently. "Once Spirit is absorbed (into JetBlue), there is no question that fares are going to go up.". External site may not meet accessibility requirements. Will the courts take away the FDA-approved over-the-counter birth control pill? For B6 it made perfect sense. He said he believed he had an "obligation" to try to rule by 2023's end. "Threats to competition like those alleged here are particularly likely to harm working and middle class families who may struggle to withstand the price increases that consolidation often brings. See here for a complete list of exchanges and delays. Others, however, say that Frontier will grow it has a large number of planes on order and fill any gap left by Spirit in the cheapest segment of the air-travel market. Of course it wont. if the merger goes through, i think JBLU will want to raise capital i cannot help but wonder if shareholders will experience dilution ? The final voting results of the special meeting, as tabulated by an independent inspector of elections, will be filed on a Form 8-K with the U.S. Securities and Exchange Commission. I have no business relationship with any company whose stock is mentioned in this article. While the two carriers share distinct differences, the two appear far more compatible than Alaska and Virgin America were in 2016. Your Exorbitant Medical Bill, Brought to You by the Latest Hospital Merger If that happens, the combined airline would be based in JetBlue's hometown of New York and led by Hayes. ", "The rest of the industry -- including JetBlue --has been forced to respond to Spirit's innovations and low prices. But diversity on college campuses is still possible, experts say, Nike Dunks, Air Jordans, Yeezy slides: Huskicks club is all about sneakers, Video: The story and science behind Rupee Beer, a lager designed to be paired with Indian food, How to maximize your childs school vacation while beating the summer slide, The brand became the verb. Why the blue Twitter bird workeduntil it didnt, Connecticut State Police issued 26,000 fake traffic tickets over eight years, according to an audit by a Northeastern researcher. His comments have been edited for brevity and clarity. To report a factual error in this article, the Federal Trade Commission's guide to antitrust laws. Oh, yes, definitely. JetBlue's and Spirit's forward-looking statements included in this press release speak only as of the date the statements were written or recorded. Spirit Announces Stockholder Approval of Merger Agreement with JetBlue "JetBlue's combination with Spirit allows it to create a compelling national challenger to these dominant airlines, while also ensuring [ultra low cost carrier] options remain available in overlap markets.". The Justice Department, which sued alongside the states of Massachusetts and New York as well as Washington, D.C., said the merger of JetBlue and Spirit would "combine two especially close and fierce head-to-head competitors. We do not know yet how this process will turn out, and for now, everything at JetBlue stays the same. We are the leader in providing customizable travel options starting with an unbundled fare. "They make air travel possible so more Americans can take a hard earned family vacation or celebrate and mourn together loved ones.". The union opposes the merger, saying that JetBlue hasn't offered its workers enough information about how it will impact their jobs going forward. JetBlue Airways announced Thursday morning it plans to buy Spirit Airlines for $3.8 billion, a merger that could have significant impacts on both Palm Beach and Fort Lauderdale international. JetBlue to buy Spirit for $3.8 billion in push to become the fifth It wont affect the NEA much at all, as Spirits presence in New York is paltry. Chris O'Meara/AP It would make JetBlue fifth, it would keep it at fifth, and reduce competition from the low-cost airlines to some extent because now there is only Frontier left. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Tel: +1 718 709 2202 Also, the DOJ says that the merger will "eliminate half of the ultra-low-cost capacity in the United States," which will "result in higher fares and fewer choices for tens of millions of travelers." Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to JetBlue and Spirit. Analysts say the merger could be good for consumers in terms of product but . FLL/SJU would become a close to a ATL/DFW-esque hub for the new merger, let alone their dominance at a lot of the smaller FL airports. There is also a ticking fee of 10 cents per share each month starting in January 2023 through closing to compensate Spirit shareholders for any delay in winning regulatory approval. Peter Shankman is an. Hey Robin and Johanna, how about you fix Jetblue before you try this stunt. Spirit Airlines, JetBlue to merge in $3.8 billion deal : NPR JetBlue carries customers to more than 100 cities throughout the United States, Latin America, Caribbean, Canada, and United Kingdom. Alaska Airlines: A Better Merger Choice For JetBlue BOSTON, March 21 (Reuters) - A U.S. judge on Tuesday scheduled an Oct. 16 trial in the U.S. Justice Department's lawsuit seeking to halt JetBlue Airways Corp's (JBLU.O) planned $3.8 billion. At least for now, we have JetBlues clear rationale for the merger. Since theres more duplication in parallel mergers, there are more cases where culture clashes can seriously cripple the combined operation. The deal, which was announced in July and approved by Spirit shareholders on Wednesday, would create the fifth largest airline, behind American Airlines, Delta, United and Southwest. Information regarding Spirit's directors and executive officers is contained in Spirit's definitive proxy statement, which was filed with the SEC on March 30, 2022. What the JetBlue and Spirit Merger Means for Customers At best, They will be lucky if the Spirit employees dont completely poison the JetBlue brand. First, the DOJ says that the "acquisition [will] allow JetBlue to elimate its largest ultra-low-cost rival," which has brought "lower fares and more options" for "particularly price sensitive consumers." United Aviate Academy Faces Concerning Allegations, Flight Attendants On British Airways Skip Meal Service So They Can Rest, United Airlines CEO Caught Flying Private Jet When United Could Not Get Him Home. It might force JetBlue to cede some routes to Frontier to keep competition at a reasonable level. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. The department's commitment to ensuring economic opportunity and fairness means holding those concerns in the front of our minds. Our forward-looking statements speak only as of the date of this press release. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.