JetBlue and Spirit announce plan to merge, creating fifth-largest U.S. airline

JetBlue Airways reached a deal to buy Spirit Airlines on Thursday, a merger that could reshape the airline industry by putting pressure on the nation’s four dominant carriers. The deal, which values Spirit at $3.8b, would create the nation’s fifth-largest airline, with a share of more than 10% of the market, behind United, which has a nearly 14% share. Delta and Southwest control more than 17% each, while American Airlines has more than 18%. The merger is likely to face a thorough investigation from the Biden administration’s antitrust regulators, who have taken an aggressive stand against corporate consolidation, especially in industries already dominated by a few businesses. Given that reality, JetBlue’s top executive sought to cast the Spirit deal as a way to make his industry more competitive, rather than less. “Our argument is clear: The best thing we can do in the US to create a more competitive industry is to allow JetBlue to grow,” Robin Hayes, the company’s CE, said in an interview. The agreement is a victory for JetBlue, which spoiled a rival offer: Frontier Airlines and Spirit called off a merger deal on Wednesday after Spirit struggled to persuade its shareholders to back the offer, which fell short of JetBlue’s by about $1b. JetBlue and Spirit said they expected to seek approval for the deal from Spirit’s shareholders this fall and from regulators by early 2024. The airlines plan to close the transaction no later than the first half of 2024 and begin operating as a single carrier by the first half of 2025. But the merger could be hard to complete. Regulators have already sued JetBlue and American over a partnership at airports in Boston and New York. And on Wednesday, the Federal Trade Commission filed a lawsuit to block the social media giant Meta’s acquisition of a small virtual reality company, Within.<br/>