Luke Sarrett | Bloomberg | Getty Images Spirit Airlines terminated its merger agreement with Frontier Airlines on Wednesday, months after a bid for all of JetBlue Airways by rival suitor JetBlue Airways threw the planned deal into disarray. Shareholders on Wednesday were set to vote only on the Spirit-Frontier combination, not the JetBlue takeover, although the New York-based airline spent weeks urging shareholders to reject the deal. Frontier’s CEO and other people familiar with the matter said Spirit did not have shareholder support for the Frontier combination. Spirit said it will 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 discount carriers that had planned to join forces on a budget behemoth. Spirit had postponed the shareholder vote four times as it struggled to garner enough support from shareholders. In a July 10 letter to his Spirit counterpart, Frontier CEO Barry Biffle had called its latest sweet offering “best and last” and said: “We are still a long way from getting approval from the shareholders of Spirit”. The end of the Spirit-Frontier deal makes it easier to reach a takeover deal with JetBlue, which is seeking to buy the budget airline outright for about $3.7 billion and refurbish its planes in a JetBlue style, with seatback screens and space for the legs. Ongoing talks to buy JetBlue could still fall apart. “While we are disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination, the Frontier Board took a disciplined approach throughout its negotiations with Spirit,” said William Franke, Frontier’s chairman of the board. partner of Indigo Partners, Frontier’s majority shareholder, in a statement. Spirit’s board has repeatedly rejected JetBlue’s increasingly sweetened offers, arguing it was unlikely regulators would approve the takeover. It is possible that no agreement will be reached. Both transactions faced a high hurdle for the Justice Department’s blessing because the Biden administration has vowed to crack down on the merger. Executives at all three airlines said their preferred deal would help them better compete with the top four U.S. carriers – American, Delta, United and Southwest – which control about three-quarters of the domestic market. Spirit, however, has raised concerns about the JetBlue takeover because of that airline’s alliance with American in the Northeast, a partnership that the Justice Department last year asked to undo. Frontier Airlines is scheduled to report results on Wednesday, when it will likely discuss termination terms.
