JetBlue Airways on Thursday announced a definitive merger agreement to acquire the Spirit Airlines for $3.8 billion, an acquisition still subject to regulatory approval that the New York-based carrier expects to officially close by 2024.
The merger agreement comes a day after Spirit terminated a previous merger agreement reached with Frontier in February. If the acquisition of Spirit clears regulatory approvals, the combination would create the fifth largest airline in the U.S., behind American, Delta, United, and Southwest.
Merging the two airlines would result in an all-Airbus fleet of 458 in-service aircraft with 300 outstanding orders, JetBlue notes. According to the merger agreement, JetBlue would bring its “JetBlue Experience” to all of the aircraft in the combined operational fleet.
Robin Hayes, chief executive officer for JetBlue, said the combined carrier will “advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines.”
JetBlue estimates that as the fifth largest airline, it would potentially control 9% of the market for passenger-carrying commercial airline flights operated in the U.S.
Ted Christie, president and chief executive officer, Spirit, commenting on the potential merger, said it would create the “the most compelling national low-fare challenger to the dominant U.S. carriers.”
“Bringing our two airlines together will be a game changer,” Christie adds.
Once approved, the combined airline would employ 34,000 total crew members, and JetBlue has also committed to “insourcing” some of the labor that Spirit currently has outsourced in certain cities. Based on December 2022 schedules, JetBlue expects the acquisition to help expand its operations to 1,700 daily flights to more than 125 destinations in 30 countries.
The merger agreement for the two airlines comes several weeks after JetBlue announced updates on some of the slots and routes operated on its new transatlantic operations to London. Spirit also recently introduced in-flight internet service to passengers for the first time.
Both airlines will continue to operate independently until the merger clears all regulatory approvals.
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