Spirit Airlines to Appeal Ruling Blocking Merger with JetBlue
Spirit Airlines and JetBlue will appeal a federal judge's ruling that blocked their plan to merge into a single carrier.
Appeal Filed Following Merger Block
JetBlue and Spirit Airlines have filed a notice of appeal with the 1st U.S. Circuit Court of Appeals after a federal judge ruled against their plan to merge.
The airlines made the decision in accordance with the terms of their agreement, and the Justice Department, which opposed the merger, has not yet commented.
JetBlue and Spirit are currently ranked sixth and seventh among the largest carriers in the United States. JetBlue had proposed the acquisition of Spirit to better compete with larger airlines.
Court Ruling and Antitrust Law Violation
A federal judge in Boston declared that the merger between JetBlue and Spirit Airlines violated antitrust law, thus leading to its block.
The U.S. Department of Justice initiated the lawsuit to prevent the $3.8 billion purchase of Spirit by JetBlue, arguing that consumers would be negatively impacted by the elimination of the country's largest discount airline.
No further details were provided regarding the airlines' appeal, which was announced in a brief statement.
Spirit Airlines' Financial Situation and Prospects
Spirit Airlines, which has been experiencing financial losses since the beginning of 2020, seeks the merger with JetBlue as a way to potentially avoid bankruptcy.
Recently, Spirit reported increased fourth-quarter revenue due to a successful holiday-travel season in December. Additionally, the airline is in negotiations with Pratt & Whitney to address engine rework issues, which have caused approximately 26 planes to be grounded daily throughout 2024.
Spirit aims to refinance $1.1 billion in debt due in September 2025 and anticipates compensation from Pratt & Whitney that will provide liquidity in the coming years.
