Spirit CEO wonders if JetBlue bid meant to block Frontier deal

A JetBlue airliner lands past a Spirit Airlines aircraft on the taxiway at Fort Lauderdale-Hollywood International Airport on Monday, April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images)

Joe Cavaretta | Sun Guard | Getty Images

Spirit Airlines CEO Ted Christie on Thursday unveiled the reasons his company rejected JetBlue Airways’ $3.6 billion offer to buy the ultra-low-cost carrier, and went so far as to suggest that the offer may have been intended to halt a planned Merger of Spirit with Frontier Airlines.

“JetBlue shareholders also do not support this deal, judging by the company’s share price. However, despite the clear concern of JetBlue’s shareholders, JetBlue continues to pursue plans to derail the Spirit-Frontier merger,” Christie said in Spirit’s Q1 report. earnings call.

“I’m wondering if blocking our deal with Frontier is really their goal,” Christie added.

JetBlue did not immediately respond to CNBC’s request for comment on Christie’s remarks.

In February, Spirit and Frontier announced plans to merge to create a major discount airline, the fifth largest carrier in the US. JetBlue’s unsolicited bid for the Spirit initially cast doubt on the association. But on Monday, Spirit rejected JetBlue’s offer in favor of a deal with Frontier, citing concerns that a JetBlue buyout would not remove regulatory hurdles.

JetBlue is partnering with American Airlines in what’s called the Northeast Alliance (NEA) to better compete with airlines like United Airlines and Delta Air Lines at major airports. JetBlue says the acquisition of Spirit will help it compete further.

Christie stressed on Thursday that the Justice Department is already taking legal action to block the JetBlue-America partnership, while stressing that “half of the expected synergies” of the JetBlue Spirit takeover “will come from capacity cuts and higher fares for consumers.”

“You don’t have to be an antitrust lawyer to see the problems here,” Christie said. “It goes against any common sense to believe JetBlue’s acquisition of Spirit would be approved by the Justice Department while it is suing to block NEA.”

Spirit stated that it submitted a counteroffer to JetBlue, including dropping NEA with American, but JetBlue rejected the alternative offer.

JetBlue CEO Robin Hayes wrote in an April 29 letter to Spirit CEO and its chairman that his proposal has a better chance of gaining regulatory approval than the Frontier merger.

“We strongly believe it is in the best interest of your shareholders that you accept our Offer, which has a significantly better chance of obtaining regulatory approval given our stronger regulatory obligations compared to Frontier,” Hayes wrote at the time.

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