Low-cost airline JetBlue Airlines (JBLU) has agreed Monday to sell Spirt Airlines' (SAVE) assets at Newark Liberty and Boston Logan airports, as the airline seeks approval from regulators for a merger with Spirit.
Takeaways
- JetBlue sold its assets at Liberty airports in Boston and Newark to Allegiant Air on Monday, seeking approval for a merger with Spirit Airlines.
- JetBlue has won a bidding war last year with rival Frontier Airlines. to take control of Spirit.
- If approved, a JetBlue-Spirit merger would create the fifth-largest U.S. airline and a low-cost juggernaut.
JetBlue will transfer two gates each at Liberty airports in Boston and Newark to Allegiant Air (ALGT), an ultra-low-cost carrier. The agreement with Allegiant also includes 43 takeoff and landing authorizations in Newark,
JetBlue has also agreed to cede control of five gates at Fort Lauderdale-Hollywood International Airport to the Broward County Department of Aviation and will work closely with that department to expand JetBlue's presence. ;Allegiant at the airport.
The decision came three months after JetBlue agreed to divest Spirit Arlines' entire stake in New York's LaGuardia Airport to Frontier Airlines (ULCC).
Last year, JetBlue won a bidding war with rival Frontier to take control of Spirit Airlines. Frontier initially submitted an acquisition offer for Spirit in February last year, before JetBlue countered with an offer of its own. After months of negotiations, Spirit shareholders finally accepted JetBlue's offer in October.
It didn't take long for the merger faces regulatory hurdles. The Justice Department filed a lawsuit in March to block the merger, on the grounds that it could give JetBlue a disproportionate share of the low-cost air travel market, further concentrating the airline industry between the hands of a few companies and lead to considerably higher prices. for travelers.
If approved, a JetBlue – The Spirit merger would create the fifth-largest U.S. airline and a low-cost heavyweight, just behind heavyweights American (AAL), Southwest (LUV), Delta (DAL) and United (UAL).
Spirit Airlines shares have skyrocketed 12% on Monday, while those of JetBlue lost 0.4%. Spirit's shares are down about 10% year to date, while JetBlue's shares are down 20%.
