JetBlue-Spirit Merger Blocked, Leaving Spirit's Future Uncertain

Analysts suggest potential bankruptcy for Spirit as the blocked merger sends shockwaves through the airline industry.

JetBlue Airways' proposed $3.8 billion purchase of Spirit Airlines was blocked by a federal court judge on antitrust grounds, stating the merger would 'allow JetBlue to eliminate its largest ultra-low-cost rival, further concentrate the airline industry, and harm American travelers.'
Spirit Airlines, which has been facing financial difficulties and hasn't turned a profit since 2019, now faces an uncertain future with some analysts suggesting a potential Chapter 11 filing and liquidation.
Spirit Airlines' stock price plummeted by 47 percent the day of the ruling, and the airline reported losses of more than $263 million in the first three quarters of 2023.
Despite the blocked merger, Spirit's low-cost fares are likely to remain in place for the time being, a phenomenon referred to as the 'Spirit Effect' where Spirit's presence in a market forces other air carriers to lower their fares.
The blocked merger may have a ripple effect across the industry, potentially affecting Alaska's recently announced merger with Hawaii Airlines and future airline mergers.