", 24/7 coverage of breaking news and live events. Based on the preliminary voting results provided by the independent inspector of election at the special meeting of stockholders held today, more than 50% of the outstanding shares of Spirit common stock . I have no business relationship with any company whose stock is mentioned in this article. Frontier is slashing fares to as low as $19 in a preemptive strike at JetBlue's new merger agreement with Spirit. Transaction Expected to Close No Later Than the First Half of 2024. Because both Spirit and Frontier were low-cost carriers. The Justice Department on Tuesday filed a lawsuit to stop the proposed merger between JetBlue and Spirit Airlines. if the merger goes through, i think JBLU will want to raise capital i cannot help but wonder if shareholders will experience dilution ? "Today JetBlue has already devoted 75% of its capacity to American Airlines, which we believe comes at a harm to passengers. Spirit CEO Ted Christie said JetBlue's proposed merger has three "puzzle pieces" that make it unlikely to ever occur. But JetBlue will have to be careful because if they want to get approval they cant go overboard with this. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. JetBlue's and Spirit's forward-looking statements included in this press release speak only as of the date the statements were written or recorded. I primarily focus on growth companies and the disruptive future they may bring. However, when you dig deeper, youll realize we could be a perfect match. Depending on the near-term macroeconomic conditions, I plan to buy Spirit Airlines' shares in the coming month. Our forward-looking statements speak only as of the date of this press release. That . Forward Looking StatementsCertain statements in this press release, including statements concerning JetBlue, Spirit, the proposed transaction and other matters, contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which represent JetBlue management's beliefs and assumptions concerning future events. As Washington Post's 1988 article puts it, "the Raegan years have witnessed one of the greatest waves of mergers, takeovers and corporate restructuring in history." I believe that it is more likely for the deal to go through than to be blocked by DOJ for a few reasons. Am I reading this correctly? It would make JetBlue fifth, it would keep it at fifth, and reduce competition from the low-cost airlines to some extent because now there is only Frontier left. The Justice Department, which sued alongside the states of Massachusetts and New York as well as Washington, D.C., said the merger of JetBlue and Spirit would "combine two especially close and fierce head-to-head competitors. Thats not an uncommon ploy. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. I have no business relationship with any company whose stock is mentioned in this article. Bottom line is that people in, say, Massachusetts, who dont travel a lot are completely baffled by Alaska Airlines. Or as to why they have Bob Marley painted on the tail of their planes. Shares of Spirit, based in Miramar, Florida, rose 3.5% at the opening bell Thursday, to $25.15, still below the price that JetBlue is offering. I dont think the merger will face much resistance from regulators as the parties are too small to move the market. View original content to download multimedia:https://www.prnewswire.com/news-releases/spirit-announces-stockholder-approval-of-merger-agreement-with-jetblue-301653632.html, Investor Relations Contact DeAnne Gabel(954) 447-7920investorrelations@spirit.com. Together, JetBlue and Spirit will bring together the best of both airlines to create the fifth largest domestic airline - a national, customer-centric, low-fare alternative to the dominant "Big Four" airlines. About SpiritSpirit Airlines (NYSE: SAVE) is committed to delivering the best value in the sky. INVESTORS AND STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED BY JETBLUE OR SPIRIT WITH THE SEC IN THEIR ENTIRETY CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT JETBLUE, SPIRIT, THE PROPOSED TRANSACTION AND RELATED MATTERS. It would have a fleet of 458 planes. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. But it would get much closer. JetBlue shares were essentially flat. If including Southwest, the four biggest players have a market share of about 67.2%. On Thursday, July 28, 2022, JetBlue and Spirit Airlines announced that they reached a merger agreement that would create the fifth largest airline in the United States, behind American,. A lawyer for JetBlue, Ryan Shores, had pushed for a trial in September, saying the airline wanted time to pursue any appeals before a July 2024 deadline to close the merger. Spirit is reviewing our proposal now and we believe their shareholders will expect them to seriously consider our offer. Spirit Airlines shareholders approved a takeover of JetBlue Airways on Wednesday, a merger that could create the fifth largest carrier . ", "The rest of the industry -- including JetBlue --has been forced to respond to Spirit's innovations and low prices. As such, there will be a massive dilution.". Annual revenue for the combined company is anticipated to be about $11.9 billion, based on 2019 revenues. Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed, or assured. The threat of the Department of Justice killing the deal because of . document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Note: Please see my Advertiser Disclosure. ", "It's good for consumers," he said. Information regarding JetBlue's directors and executive officers is contained in JetBlue's definitive proxy statement, which was filed with the SEC on April 7, 2022, and in JetBlue's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 22, 2022. But diversity on college campuses is still possible, experts say, Nike Dunks, Air Jordans, Yeezy slides: Huskicks club is all about sneakers, Video: The story and science behind Rupee Beer, a lager designed to be paired with Indian food, How to maximize your childs school vacation while beating the summer slide, The brand became the verb. Why the blue Twitter bird workeduntil it didnt, Connecticut State Police issued 26,000 fake traffic tickets over eight years, according to an audit by a Northeastern researcher. External site may not meet accessibility requirements. Adding spoiled milk to regular milk doesnt make great milk. The anti-trust concerns, particularly in Florida are immense: if the U.S. Department of Transportation is blocking JetBlues tie-up with American Airlines, isnt this far worse in terms of an overlapping route map? Now it needs to win over antitrust regulators. If its all commercial passenger air transportation, the DoJ has no chance. I guess you can chalk up the on-time part to having a mostly leisure passenger base that always (and I mean always) has plane boarding issues, and the delays/cancellations to centering their entire route network around the great weather in Florida. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. The F.T.C. The companies characterized the $3.8 billion. Spirit and. A look at this years Wimbledon handshaking controversy, Northeastern grad Emmanuel Nasamu talks about the biggest risk he has ever taken, Northeastern Universitys rapidly growing Toronto campus celebrates 740 graduates at convocation, From Northeastern to Washington, one on one with David S. Ferriero, former archivist of the United States, Punk rock and tacos: How a punk rock drummer turned real estate agent found restaurant success, Network Science Institute expansion to London creates new European hub for trailblazing academic field. "JetBlue's combination with Spirit allows it to create a compelling national challenger to these dominant airlines, while also ensuring [ultra low cost carrier] options remain available in overlap markets.". Once you reach breakeven on a flight then all the revenues from the extra seats go right to your gross margin line. There are still many unknowns and milestones before we reach the destination, and well all need to have patience and focus as the process plays out. Frontier-Spirit merger promises better deals and service; critics aren't so sure, announced their plan to merge in February. Probably divest most of its gates at Charlotte, but would that have been useful? ", Spirit's model of unbundling certain services like carry-on baggage allows for consumers to chose what they want to pay for, which is their "secret weapon. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. "Threats to competition like those alleged here are particularly likely to harm working and middle class families who may struggle to withstand the price increases that consolidation often brings. He can be reached at nate.raymond@thomsonreuters.com. Kevin Spaceys acquittal on sexual assault charges will have chilling effect on other victims coming forward, legal expert says, The verdict is in: Northeastern program helps judges better understand the forces that affect peoples health, The Supreme Court struck down affirmative action. I believe the legal footing for the DOJ's argument is rather weak. In anticipation of a DOJ lawsuit, JetBlue said a merger with Spirit would bring down costs for customers. JetBlue engaged the public courtship of spirit, which was rejected more than once until spirit finally accepted an offer. In addition, investors and stockholders are able to obtain free copies of the proxy statement and other documents filed with the SEC by JetBlue and Spirit on JetBlue's Investor Relations website at http://investor.jetblue.com and on Spirit's Investor Relations website at https://ir.spirit.com. All quotes delayed a minimum of 15 minutes. Duh. Any outlook or forecasts in this press release have been prepared without taking into account or consideration the Merger with Spirit. "The company's market capitalization is about $2.26 billion, far smaller than the price it is paying for Spirit Airlines, and the company's cash stands at about $1 billion. "JetBlue's plan would eliminate the unique competition that Spirit provides -- and about half of all ultra-low-cost airline seats in the industryand leave tens of millions of travelers to face higher fares and fewer options. In the combined airline, JetBlues unique product and service at low fares would stay central to what we offer, and our current mission, values and culture would stay core to who we are. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Barclays and Morgan Stanley & Co. LLC are serving as financial advisors to Spirit, and Debevoise & Plimpton LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors. First, the DOJ says that the "acquisition [will] allow JetBlue to elimate its largest ultra-low-cost rival," which has brought "lower fares and more options" for "particularly price sensitive consumers." The key is the courts determination of the relevant market. Why its an important development in pediatric medicine, How are people with aphasia actually using language? 0:04. Spirit Airlines, whose shareholders approved the merger with JetBlue in October 2022, expects the Department of Justice (DOJ) to decide whether to allow the airline to proceed with the merger in the next 30 days. In fact, I think Alaskas greatest failure in this was that they did not convert to the Virgin America name and pay royalties to Branson. Peter Shankman is an. hide caption. These statements are intended to qualify for the "safe harbor" from liability established by the Private Securities Litigation Reform Act of 1995. The combined airline would fly under the JetBlue brand and be based in New York City. Its an interesting question for consumers. Further, the judge assigned to the case is likely to have different views than DOJ. Which sailed through without batting an eye. JetBlue is New York's Hometown Airline, and a leading carrier in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando, and San Juan. Current operational performance is a mess and I feel bad for the (still decent) cabin crew. We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to Team Members, Guests and stockholders.". When the buyout was announced, Spirit stock price was $25.66, giving a market cap of around $3 billion, below the deal value, suggesting that the market has some doubts about the merger, linked to antitrust issues, says Ravi Sarathy, a DAmore-McKim School of Business professor of international business and strategy who studies the airline industry. Boston isnt much of an issue because its not slot-controlled. https://www.prnewswire.com/news-releases/spirit-announces-stockholder-approval-of-merger-agreement-with-jetblue-301653632.html. It said the deal was "presumptively illegal" and that JetBlue planned to remove 10% to 15% of seats from every Spirit plane. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Decoupling from American Airlines makes it more likely that the U.S. Department of Justice (DOJ) will approve the pending JetBlue-Spirit merger, says Savanthi Syth, airline analyst at Raymond . Its possible that given JetBlues higher cost structure and the slightly better quality of service they offer passengers, that fares will go up. JetBlue said the deal would result in annual savings of $600 million to $700 million. Professor asks: Wheres the evidence? If you have an ad-blocker enabled you may be blocked from proceeding. Just a company getting bigger and greedier and ultimately will likely result in less for paying customers in the future. We wanted to be transparent with you about why we would consider buying another airline, and if we reach an agreement, we will let you know as soon as we are legally allowed to. However, in March of 2023, the United States Department of Justice sued in an attempt to block the. Does JetBlue really intend to tear out all the Spirit Airlines seats and make every plane feel like a current JetBlue aircraft? Spirit Airlines on Wednesday delayed shareholder vote on its proposed merger with Frontier Airlines until July 8, hours before a meeting scheduled for Thursday so it can further discuss options. JetBlue will pay $33.50 per share, which is an equity value of $3.8 billion. If youre flying to the same city at roughly the same time and your flights are on average 75% to 80% full, by reducing some of those routes you can move up to 90% or even higher. Has JetBlues operational performance ever been good? I wrote this article myself, and it expresses my own opinions. Spirit CEO Ted Christie is being thrust into the awkward position of defending a sale to JetBlue after arguing vehemently against it, saying that antitrust regulators would never let it happen. Investors and stockholders are able to obtain free copies of the proxy statement and other documents filed with the SEC by JetBlue and Spirit through the website maintained by the SEC at www.sec.gov. 6 things to know about San Diego Padres draft pick Eric Yost of Northeastern University, Should athletes shake hands during war? Each year he travels more than 200,000 miles by air and has visited more than 135 countries. JetBlue will pay $33.50 per share, which is an equity value of $3.8 billion. Hey Robin and Johanna, how about you fix Jetblue before you try this stunt. Therefore, I believe Spirit Airlines is a buy while JetBlue is a hold due to the high acquisition fee. Spirit Airline's board of directors has rejected JetBlue's bid to acquire the airline and will proceed with its existing merger agreement with Frontier, one of its ultra-low-cost competitors,. USA TODAY. Spirit is unquestionably the worst airline in the US with simply the worst customer service and cabin crews in the business. This communication may be deemed to be solicitation material in respect of the proposed merger between JetBlue and Spirit. Spirit had been talking for months with Frontier about a deal. Keeping the economy open to all Americans, regardless of income status is a priority across the department.". Crashed UFOs? Even then, it will take time to get regulatory approval and merge the airline under one operating certificate. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the COVID-19 pandemic and government-imposed measures to control its spread; risk associated with execution of our strategic operating plans in the near-term and long-term; our extremely competitive industry; risks related to the long-term nature of our fleet order book; volatility in fuel prices and availability of fuel; increased maintenance costs associated with fleet age; costs associated with salaries, wages and benefits; risks associated with doing business internationally; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market; risks associated with extended interruptions or disruptions in service at our focus cities; risks associated with airport expenses; risks associated with seasonality and weather; our reliance on a limited number of suppliers; risks related to new or increased tariffs imposed on commercial aircraft and related parts imported from outside the United States; the outcome of lawsuits filed against us related to our Northeast Alliance with American Airlines Group Inc.; the occurrence of any event, change or other circumstances that could give rise to the right of JetBlue or Spirit Airlines Inc. (Spirit) or both of them to terminate the Merger Agreement; failure to obtain certain governmental approvals necessary to consummate the merger with Spirit (the Merger); the outcome of the lawsuit filed by the Department of Justice and certain state Attorneys General against us and Spirit related to the Merger; risks associated with failure to consummate the Merger in a timely manner or at all; risks associated with the pendency of the Merger and related business disruptions; indebtedness following consummation of the Merger and associated impacts on business flexibility, borrowing costs and credit ratings; the possibility that JetBlue may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all; challenges associated with successful integration of Spirits operations; expenses related to the Merger and integration of Spirit; the potential for loss of management personnel and other key crewmembers as a result of the Merger; risks associated with effective management of the combined company following the Merger; risks associated with JetBlue being bound by all obligations and liabilities of Spirit following consummation of the Merger; risks associated with the integration of JetBlue and Spirit workforce, including with respect to negotiation of labor agreements and labor costs; the impact of the Merger on JetBlues earnings per share; risks associated with cybersecurity incidents; heightened regulatory requirements concerning data security compliance; risks associated with reliance on, and potential failure of, automated systems; our inability to attract and retain qualified crewmembers; our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; reputational and business risk from an accident or incident involving our aircraft; risks associated with our reputation and brand; our significant fixed obligations; our substantial indebtedness; financial risks associated with credit card processors; restrictions as a result of our participation in governmental support programs; risks associated with seeking short-term additional financing liquidity; failure to realize the value of intangible or long-lived assets; risks associated with disease outbreaks or environmental disasters affecting travel behavior; compliance with future environmental regulations; the impacts of federal budget constraints or federally imposed furloughs; climate change; changes in government regulations in our industry; acts of war or terrorism; global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel; and risks associated with the implementation of 5G wireless technology near airports that we operate in. We make it possible for our Guests to venture further and discover more than ever before. 5, but it wouldnt be as large as Southwest. In connection with the proposed transaction, Spirit has filed with the SEC a definitive proxy statement on September 12, 2022. Judge William, assigned to the case, likely has a favorable view towards corporate mergers. It may be that most of the public like a slightly better service and I think JetBlue may offer that, but most likely it will be at a slightly higher average cost fare than what Spirit was offering. Judge William was appointed by former President Ronald Raegan, whose administration was strongly in favor of mergers. Simply put, where spirit competes other airlines including JetBlue respond by competing vigorously and lowering the price of airfare to attract customers. As far as Im concerned, SAVE is not even a viable flying option. 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. Thats not to say we cant learn from Spirit and incorporate things they do well into JetBlue. Will Barbenheimer change the movie industry or is it just an anomaly? What are his chances for recovery? MIRAMAR, Fla., Oct. 19, 2022 /PRNewswire/ -- Spirit Airlines, Inc. ("Spirit" or the "Company") (NYSE:SAVE) today announced that its stockholders approved the merger agreement with JetBlue Airways Corporation ("JetBlue") (NASDAQ: JBLU). Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. No Offer or SolicitationThis press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Spirit and JetBlue expect to conclude the regulatory process and close the transaction no later than the first half of 2024. Democrats and Republicans consume very different news contenton Facebook, researcher says. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.

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