Stock Groups

Spirit CEO wonders whether JetBlue bid meant to block Frontier deal

[ad_1]

JetBlue’s airliner is seen passing a Spirit Airlines plane on a taxiway at Fort Lauderdale Hollywood International Airport, Monday April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images)

Joe Cavaretta | Sun Sentinel | Getty Images

Spirit AirlinesOn Thursday, Ted Christie, CEO of Ted Christie laid out the reasons why his company was rejected JetBlue Airways$3.6 billion offer to buy the ultra-low-cost carrierIt was even suggested that Spirit may have tried to prevent Spirit’s merger plan with Frontier Airlines.

According to the company’s stock performance, JetBlue shareholders have not supported this deal. However, JetBlue shareholders have expressed concern, and JetBlue is still pursuing disruption to Spirit-Frontier,” Christie told Spirit’s earnings call.

Christie said, “I’m curious if blocking Frontier’s deal is their real goal.”

CNBC did not reach JetBlue immediately for comment regarding Christie’s comments.

Spirit and Frontier announced their plans to merge, creating a discount airline that would be the fifth largest carrier in America. JetBlue initially rejected Spirit’s offer. Spirit, however, rejected JetBlue’s offer to merge with Frontier, saying that it would not clear regulatory hurdles.

JetBlue and American Airlines in what’s known as the Northeast Alliance (NEA) to better compete against the likes of United AirlinesAnd Delta Air LinesAt major airports. JetBlue claims that Spirit’s acquisition will help them compete.

Christie stressed Thursday that the Department of Justice is already suing to block the JetBlue-American partnershipWhile he acknowledged that JetBlue would absorb Spirit, “half of the expected synergies,” he also said that increased capacity and fares for consumers “would be necessary.”

Christie stated that you don’t have to be antitrust lawyer to understand the problems. It’s absurd for anyone to imagine that JetBlue might acquire Spirit, while JetBlue is suing the NEA to prevent it from being approved.

Spirit said it submitted a counter offer to JetBlue – including abandoning the NEA with American – but JetBlue rejected the alternative proposal.

Robin Hayes, JetBlue’s CEO, wrote to Spirit CEO and Chairman on April 29 that his offer has a greater chance of clearing regulators then the Frontier merger.

Hayes said that they believed it was in the stockholders’ best interest to approve our Proposal. It has significantly better odds of regulatory clearance because of Frontier’s stronger regulatory commitment.

[ad_2]