The airline said it doesn’t believe regulators would allow JetBlue to buy Spirit.
JetBlue announced Monday that it was offering Spirit a $200 million break-up fee if the deal is not completed for antitrust reasons. But a spokesperson from Spirit said the company’s board rejected the break-up fee offer, too.
The ultra-low cost airline market
Both Spirit and Frontier are so-caled ultra-low cost carriers, offering very low base fares but charging extra for just about everything else — even carry-on baggage.
Spirit thinks the Justice Department is unlikely to approve a deal in which an ultra-low cost carrier gets purchased by a higher fare airline, raising fares for consumers, the company said in its letter to JetBlue.
The Biden administration has indeed been taking a much more active approach in promoting competition and challenging mergers on antitrust grounds.
“Spirit believes that merging with Frontier will enable the combined ultra-low cost carrier business to achieve scale, improve operational reliability, have increased relevance to consumers, and do an even better job of delivering ultra-low fares to more consumers and competing more effectively against the Big Four carriers, as well as against JetBlue,” said Spirit’s letter to JetBlue Monday.
Shares of Spirit fell 9% in late morning trading Monday on the announcement, while Frontier share fell about 2%. Shares of JetBlue gained 2%.