Shareholders of Spirit Airlines (NK, Fort Lauderdale International) have approved a USD3.8 billion merger agreement with JetBlue Airways (B6, New York JFK), marking a milestone in a transaction that will create the US's fifth-largest airline, a process that is, however, still subject to regulatory approval.
Based on preliminary voting results from a special stockholders meeting held on October 19, more than 50% of the outstanding shares of Spirit common stock voted in favour of the merger. The final voting results will be filed with the US Securities and Exchange Commission (SEC), the airline said in a statement.
Spirit President and Chief Executive Officer Ted Christie welcomed the vote as "an important step forward" to creating a "low-fare challenger to the dominant US carriers". "We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction," he added.
Spirit Airlines and JetBlue Airways expect to conclude the regulatory process and close the deal no later than the first half of 2024. Once merged, the airlines will have combined annual revenue of USD11.9 billion.
However, the merger faces political opposition from Democrat senators Elizabeth Warren and Alex Padilla, who have petitioned Transportation Secretary Pete Buttigieg to stop the merger, arguing that it is anti-competitive and not in the public interest. They pointed out that JetBlue Airways is already the subject of an antitrust suit over its alliance with American Airlines (AA, Dallas/Fort Worth). They fear the merger will raise fares on routes with limited budget airline competition, leaving Frontier Airlines (F9, Denver International) the sole large low-cost carrier.
Following a protracted bidding war, Spirit Airlines terminated a similar merger agreement with Frontier Airlines before opting to go with JetBlue.
