JetBlue Airways has agreed to acquire rival discount carrier Spirit Airlines, a $3.8 billion combination that would create the nation’s fifth-largest carrier.
The deal announced Thursday comes one day after Spirit terminated merger talks with Frontier, and is subject to shareholder and regulatory approval.
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The combined company will command roughly 9 percent of the commercial airline market, according to JetBlue’s announcement, with a projected $11.9 billion in annual revenue.
JetBlue CEO Robin Hayes said he wants to create a “customer-centric” airline to force larger rivals to drop fares.
“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes.”
Spirit, Frontier merger talks end as JetBlue’s competing offer awaits
Spirit had terminated merger talks with Frontier, another low-budget carrier, moments before it was expected to announce the results of a shareholder vote. Spirit’s board had postponed its shareholder vote four times while it examined competing offers from Frontier and JetBlue.
Spirit shares jumped 4 percent in premarket trading, while JetBlue climbed 1.2 percent.
The transaction is expected to close by the first half of 2024. The two airlines plan to operate independently until the acquisition is completed.