JetBlue faces struggle in selling Spirit takeover bid to investors

Robin Hayes, the ebullient chief executive of JetBlue Airways Corp (JBLU.O), was on an Amtrak train on Tuesday coming back from Boston when news broke that his company had made an offer to acquire Spirit Airlines Inc (SAVE.N). Hayes said the company was not yet ready to go public with its offer for the ultra-low-cost carrier, but the news leak forced its hand. On a conference call the next morning, the reasons were apparent as JetBlue struggled to convince investors of the rationale behind its unsolicited $3.6 billion bid. The surprise move by the New York-based carrier has baffled Wall Street because it seeks to combine two companies with very little in common other than fleets dominated by Airbus jets. As a result, the deal is expected to be very expensive for JetBlue, which raises questions about any assumed synergies. JetBlue did not immediately respond to a request for comment. The company's stock has fallen about 19% since the news broke. JetBlue shares were down 4.2% at $11.92 on Thursday afternoon. A main concern of investors is the starkly different business models of the two carriers. Spirit is a no-frills carrier that relies on fares stripped down to the lowest possible level, supplemented by charges for extras such as booking through a call center, a strategy known as unbundling. The success of its business model is driven by a low cost structure that has allowed it to offer low base fares and maintain high profit margins.<br/>