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Spirit and Frontier Airlines cancel merger deal. It could be good news for JetBlue's competing bid — but bad news for cheap tickets.

Jul 28, 2022, 04:09 IST
Business Insider
Spirit Airlines A319 aircraft.Marcus Mainka/Shutterstock
  • Spirit Airlines and Frontier Airlines said they won't merge months after a potential deal was announced.
  • JetBlue is also looking to buy Spirit.
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Spirit Airlines ended its merger agreement with Frontier Airlines on Wednesday.

The two low-cost airlines announced plans to merge in February, pending a shareholder vote on Frontier's bid. Spirit had urged shareholders to approve the merger but postponed the vote several times before it was eventually canceled

"While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our Team Members on the transaction over the past many months," Ted Christie, President and CEO of Spirit Airlines, said in a statement. "Moving forward, the Spirit Board of Directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders."

Frontier said it was disappointed that Spirit's shareholders "failed to recognize the value and consumer potential inherent in our proposed combination."

JetBlue cast the Frontier-Spirit deal into doubt when it offered to buy Spirit this spring. JetBlue raised its offer in recent months to stave off Frontier's bid. In a statement to Insider, the airline said it was "pleased" that the deal didn't go through and that it remained committed to buying Spirit.

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One fewer discount airline could mean higher prices for consumers, some industry watchers have warned.

Analysts at MKM Partners said that Spirit sees itself as a "check" on escalating airfares. If it's absorbed into JetBlue, the combined airline could charge higher fares, MKM said in a note to clients in May.

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