Spirit shareholders approve sale to JetBlue
Florida-based Spirit Airlines said its shareholders voted Wednesday to approve the airline’s $3.8 billion sale to New York-based JetBlue Airways, clearing the next step in a long road to combine the two airlines.
Discount airline Spirit and JetBlue now face an arduous regulatory approval examination by the Justice Department, which analysts say will be an uphill battle to create the nation’s fifth-largest airline. The Biden administration has warned overall that it would closely scrutinize proposed airline mergers and acquisitions.
Air travelers won’t see any changes as regulators analyze what effects uniting these two airlines would have on the airline marketplace, a process expected to take up to two years. In the meantime, Spirit and JetBlue will keep flying as separate airlines.
“This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant U.S. carriers,” Ted Christie, the CEO of Spirit Airlines, said in a statement.
While Spirit and JetBlue argue the deal will benefit consumers because it will enable the two carriers to compete with the country’s four legacy airlines — American, United, Delta and Southwest — there’s disagreement.
U.S. Sen. Elizabeth Warren, a Democrat from Massachusetts, wrote a letter to the Department of Transportation in September, urging the department to use its “underutilized” authority to block deals that are not “consistent with public interest.”
“Airline industry competitiveness is in free fall, and consumers are feeling the consequences,” Sen. Warren wrote in her letter, noting that four airlines control 80% of the domestic market.
The Justice Department is already suing JetBlue and American Airlines for their Northeastern Alliance, which department officials say strips competition in New York and Boston. JetBlue has responded by saying it will divest its business in New York and Boston.
Spirit, which employs more than 3,000 people in South Florida, has been at the center of the airline industry’s biggest story of the year. The airline announced in February that it intended to merge with fellow ultra-low fare carrier Frontier Airlines, only to have JetBlue thwart the deal by making a more lucrative offer and Frontier bowing out of the bidding war.
Broward County stands to lose a major airline headquarters under the deal terms Miramar-based Spirit and JetBlue agreed upon. If cleared by federal regulators, the combined airline will remain in JetBlue’s Queens, New York, home and JetBlue’s CEO Robin Hayes will be at the helm.
Spirit officials say JetBlue plans to continue a strong presence in South Florida. It’s unclear what will happen with Spirit’s planned corporate campus in Dania Beach, but company officials have said construction plans are ongoing.
