JetBlue disclosed its agreement with Spirit Airlines to mutually terminate the merger agreement initially established in July 2022.
In a joint decision, JetBlue (NASDAQ: JBLU) and Spirit Airlines (NYSE: SAVE) have chosen to terminate their merger agreement, citing the unlikelihood of meeting closing conditions by the specified date of July 24, 2024. Despite both companies recognizing the procompetitive advantages of the merger, they believe that moving forward independently is in the best interest of their respective interests.
JetBlue’s CEO, Joanna Geraghty, expressed the company’s initial optimism about the merger, emphasizing the potential for a national low-fare, high-value competitor against the Big Four airlines. However, acknowledging the remaining hurdles to closing the deal, both airlines decided that pursuing independent paths would be more beneficial. Geraghty extended best wishes to the Spirit team in their future endeavors.
As part of the termination agreement, JetBlue will pay Spirit $69 million, resolving all outstanding matters related to the transaction and releasing any mutual claims. Geraghty highlighted JetBlue’s robust organic plan and competitive advantages, such as a beloved brand, a unique value proposition, and strategic geographic positioning.
JetBlue is actively implementing initiatives outlined in its fourth-quarter earnings call to restore profitability. These include focusing on core strengths, deepening network relevance, and enhancing product offerings to improve competitiveness while achieving meaningful cost savings.
The airline has identified revenue initiatives for 2024, expecting over $300 million in benefits from increased distribution, partnerships, loyalty program enhancements, network expansion, and ancillary initiatives. Cost-saving measures, including $175-200 million from structural programs and $75 million from fleet modernization, position JetBlue to approach breakeven operating margins in 2024.
JetBlue plans to share additional details about its long-term strategy and ongoing initiatives during an Investor Day on Thursday, May 30, 2024. Analysts and investors can anticipate further information about this event in the coming weeks.
About JetBlue
JetBlue is New York’s Hometown Airline®️, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando, and San Juan. JetBlue carries customers to more than 100 destinations throughout the United States, Latin America, Caribbean, Canada, and Europe. For more information and the best fares, visit jetblue.com.