THURSDAY DEC 07, 2023
×
Search AeroXplorer
JetBlue Launches Hostile Takeover Bid to Acquire Spirit Airlines

JetBlue Launches Hostile Takeover Bid to Acquire Spirit Airlines

BY JOHN PULLEN 570d AGO 0 COMMENTS

Frontier and Spirit Airlines made headlines earlier this year when the two ultra-low-cost carriers announced plans to merge, creating the fifth largest airline in the United States. However, these plans were thrown into question when JetBlue Airways also made an offer to acquire Spirit. Things began to calm when Spirit Airlines rejected JetBlue, instead pursuing the proposed deal with Frontier.

 

Photo: AeroXplorer | Edwin Sims

 

However, yet another twist occurred this morning when JetBlue launched a hostile takeover bid to win back Spirit from Frontier Airlines. JetBlue is now offering $30 per share, significantly more than its ultra-low-cost rival, and claims a deal offering $33 per share is still a possibility. As a result, Spirit Airlines' stock took off, rising 22% this morning alone. Clearly, investors have enthusiasm for the proposed deal.

 

JetBlue's offer threatens to throw a wrench in Frontier's merger aspirations. The carrier believed that joining forces with Spirit would create more low-cost options for travelers across the country, and that a larger ultra-low-cost carrier would better compete with the Big Four U.S. airlines (American, Delta, United and Southwest).

 

JetBlue believes that a merger with Spirit would create more options for travelers across the country. Photo: AeroXplorer | Adam Jackson

 

Even if Spirit did accept JetBlue's offer, the deal would have additional challenges. Consolidation could have a negative impact on airfares, especially in markets like Fort Lauderdale, where both carriers have a large presence. If the Department of Justice acknowledges this potential issue, getting the deal approved might be a challenge, especially considering the fact that JetBlue is not as focused on offering the lowest fares when compared to Spirit.

 

This deal would have benefits, however. JetBlue, through the acquisition of Spirit, could boost its presence in key markets (such as Newark and Florida) where both carriers have an outsized presence. Additionally, the entirety of Spirit's fleet is composed of the Airbus A320 family, which matches well with JetBlue's mostly-A320 family fleet. This commonality can help with employee training costs.

 

Fleet compatibility across the two airlines will make it easier to train crew. Photo: AeroXplorer | Andrew Salisbury

 

Regardless of which deal Spirit pursues, it's clear that the carrier has options for growth through consolidation. Meanwhile, it's clear that JetBlue is very eager and determined to grow its operations through Spirit.

John Pullen
John is an aviation enthusiast passionate about the airline industry and the marketing and financial strategies that allow airlines to rise and fall. With a strong background in the history of the industry as well as extensive knowledge regarding current industry events, his insights allow him to publish meaningful and insightful articles about the airline industry.

Comments (0)

Add Your Comment

SHARE

TAGS

NEWS JetBlue Spirit JetBlue Airways Spirit Airlines Merger Frontier Frontier Airlines Hostile Takeover

RECENTLY PUBLISHED

Who Are the Public and Private Stakeholders That Own Airports? It may come as a random thought or something you've actively thought about. Regarding airlines, you may be aware that specific governments or firms could own these. But what about airports? The "Who owns airports?" issue is not much different from airlines. Therefore, this article will analyze the various companies and government entities that own airports. INFORMATIONAL READ MORE »
American AAdvantage, Delta SkyMiles, and United MileagePlus: The Battle of the Frequent Flyers Frequent flyer programs are essential for people who frequently go on flights for business or personal reasons. Whether you often travel due to your job as a tech consultant at Deloitte or to take care of your aging grandparents in Jordan, these programs can help you with your travels. INFORMATIONAL READ MORE »
How Aircraft Conduct Search and Rescue Operations Aircraft have been used in search and rescue operations for a variety of purposes, and not just in modern times. This article explores the intricacies of the use of aircraft within search and rescue operations, revealing how technology advancement has played a crucial role in the use of aircraft within search and rescue. INFORMATIONAL READ MORE »


SHOP

$2999
NEW!AeroXplorer Aviation Sweater Use code AVGEEK for 10% off! BUY NOW

FOLLOW US ONLINE