JetBlue and Spirit have announced that they will formally terminate their $3,8 billion merger agreement. JetBlue had planned to buy Spirit, but the US Department of Justice (DOJ) blocked the merger. A federal judge agreed with the DOJ in January and blocked the deal on antitrust grounds.
After the judge's decision, JetBlue and Spirit announced that they would continue to fight the decision and complete the merger. In a joint statement at the time, the two carriers said the merger would lead to lower fares for passengers and the resulting company under the JetBlue brand would be able to compete on an equal footing with the big four US carriers.
The two airlines recently issued a joint statement saying that abandoning the merger agreement is "the best way forward," citing the challenging legal hurdles ahead. The airlines say that while they still believe in the competitive benefits of the merger, they are unlikely to be able to reach the necessary legal and regulatory approvals by July 24 under the deal.
JetBlue indicated after the initial ruling that it would not be able to appeal the decision. However, there was strong pushback from Spirit shareholders, so the appeal was filed. JetBlue will now pay Spirit $69 million under the deal if the deal could not meet regulatory requirements. Spirit shareholders also received upfront payments of $425 million from JetBlue during the merger proceedings.