Spirit Airlines ended its merger agreement with Frontier Airlines, months after JetBlue Airways made a rival bid that ultimately marred the planned merger.
The announcement ends the ongoing battle over the budget airline. Spirit and Frontier are known for their bare-bones services and low fares.
Spirit said it would continue its “ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stakeholders.”
If JetBlue does take over Spirit, it would then create the fifth-largest airline in the United States.
If Spirit and Frontier had merged, that too would have resulted in the fifth-largest airline. Shareholders were meant to vote this week only on the proposed Spirit-Frontier combination. JetBlue spent weeks trying to convince shareholders to turn the merge offer down.
JetBlue made a statement that it was pleased the Frontier agreement was terminated and that it is engaged in discussions with Spirit “toward a consensual agreement as soon as possible.”
The termination of the Spirit-Frontier deal is a blow to the discount carriers that planned to combine forces into a budget behemoth.
Frontier’s CEO and other people familiar with the matter had previously said Spirit lacked the shareholder support for the Frontier combination.
The termination of the Spirit-Frontier merger makes it easier for JetBlue to do a takeover deal. JetBlue is seeking to buy Spirit Airlines outright for about $3.7 billion and refurbish its planes in JetBlue style, featuring seatback screens and legroom.
Ongoing talks for a JetBlue takeover could still fall apart.
Spirit’s board has repeatedly rebuffed JetBlue’s increasingly sweetened offers, arguing that it was unlikely that regulators would approve the takeover.
If JetBlue does buy out Spirit, it would face a high hurdle for a blessing from the Department of Justice. The Biden administration has vowed to crack down on consolidation.