A Frontier Airlines plane passes a Spirit Airlines plane at Indianapolis International Airport in Indianapolis, Indiana on Monday, Feb. 7, 2022.
Luke Sharret | Bloomberg | Getty Images
On Wednesday, shareholders were expected to vote only on the Spirit-Frontier combination, not on a takeover of JetBlue, despite the New York-based airline having spent weeks urging shareholders to refuse the deal.
Frontier’s CEO and others familiar with the matter said Spirit does not have shareholder support for the Frontier combination.
Spirit said it would continue its “ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our shareholders.”
A JetBlue takeover of Spirit or a Spirit-Frontier combination would create the nation’s fifth-largest carrier.
The termination of the Frontier deal is a blow to low-cost carriers who planned to combine forces in a giant budget. Spirit had postponed the shareholder vote on the merger four times as it struggled to garner enough shareholder support. In a July 10 letter to his Spirit counterpart, Frontier CEO Barry Biffle called his last sweet offer her”best and finaland said, “We are still a long way from getting Spirit shareholder approval.”
The termination of the Spirit-Frontier deal facilitates a buyout deal with JetBlue, which is seeking to buy the budget airline for around $3.7 billion and refurbish its planes in JetBlue style. , with backrest screens and leg room. Ongoing talks for a takeover of JetBlue could still fall apart.
“While we are disappointed that Spirit Airlines shareholders have failed to recognize the value and consumer potential inherent in our merger proposal, the Frontier Board of Directors has taken a disciplined approach throughout its negotiations with Spirit,” said William Franke, Chairman of Frontier’s Board of Directors and Chief Executive Officer. partner of Indigo Partners, majority shareholder of Frontier in a press release.
Spirit’s has repeatedly rejected increasingly watered-down offers from JetBlue, arguing that regulators are unlikely to approve the takeover.
It is possible that no agreement will be reached. Both deals faced a steep hurdle for the Justice Department’s blessing as the Biden administration pledged to crack down on the consolidation.
Executives from the three airlines have said their preferred deal will help them better compete with the four major US carriers – American, Delta, United and South West — which control about three-quarters of the domestic market.
Spirit, however, raised concerns about a takeover of JetBlue because of that airline’s alliance with American in the Northeast, a partnership the Justice Department sued last year to rescind.
Also on Wednesday, Frontier Airlines reported second-quarter profit of $13 million, down from a year ago and from 2019. The carrier said higher costs offset an increase in revenue, which is was $909 million, up 43% from the same quarter. of 2019, before the pandemic.