The airline JetBlue gives up buying its rival Spirit after a court ruling that blocks the operation
The airline JetBlue Airways announced this Monday that it is giving up buying its ‘low-cost’ rival Spirit Airlines after the judicial ruling of a federal court that blocked the $3.8 billion (€3.5 billion) operation citing the foreseeable damage to free competition in the sector.
Although the companies have appealed the ruling, JetBlue and Spirit have each issued statements in which they stated that it had become clear that they would not be able to overcome the legal obstacles to complete the merger. Consequently, JetBlue will pay 69 million dollars (63.6 million euros) to Spirit as cancellation.
“Given the obstacles that remain to be overcome, we have decided together that it is in the best interests of both airlines to move forward independently,” said JetBlue CEO Joanna Geraghty.
For his part, his Spirit counterpart, Ted Christie, has been “disappointed” that the purchase is not going to go ahead, although he has been “confident” in the company’s future, given that they had already anticipated that the regulatory requirements would not allow it to prosper.
Spirit has been chaining losses for several years despite the fact that large airline companies have already returned to profitability after the demand for flights normalized after the pandemic.
However, JetBlue had already threatened to withdraw from the deal in a statement filed in January with the Securities and Exchange Commission (SEC) after Spirit’s market capitalization had been reduced to around $700 million ( 644.7 million euros), well below JetBlue’s initial offer of 3.8 billion dollars.
