JetBlue and Spirit abandon their $3.8 billion merger

JetBlue and Spirit Airlines are throwing out their $3.8 billion merger agreement. Both airlines agreed to terminate the deal, citing “legal and regulatory approvals” that “were unlikely to be met” by the merger’s July 2024 deadline.

A federal court blocked the deal in January over concerns that the merger would stifle competition in the airline industry. JetBlue and Spirit filed an appeal shortly after, and a court was set to hear the appeal in June. Now that the deal is off, Attorney General Merrick B. Garland calls the decision a “victory for the Justice Department’s work on behalf of American consumers,” adding that the merger would’ve caused “higher fares and fewer choices.”

In a press release on Spirit’s website, CEO Ted Christie expressed disappointment that the company couldn’t go through with the deal “that would save hundreds of millions for consumers and create a real challenger to the dominant ‘Big 4’ U.S. airlines.”

Meanwhile, JetBlue CEO Joanna Geraghty said in a statement that the company is “proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently.”

JetBlue will pay Spirit $69 million for terminating the deal, which dates back to 2022. That’s when JetBlue launched a hostile takeover of Spirit after the low-cost carrier’s deal with Frontier Airlines fell through. Both JetBlue and Spirit are dealing with financial issues of their own. While JetBlue reported a decline in revenue last quarter, Spirit is attempting to stem its losses after grounding dozens of its aircraft last year due to an issue affecting Airbus engines.

Update March 4th, 11:06AM ET: Added a statement from the DOJ.