Low-cost carriers JetBlue Airways and Spirit Airlines have canceled their $3.8-billion merger agreement after a U.S. judge blocked the deal in January, citing concerns about anti-competition. The proposed merger aimed to create the fifth-largest carrier in the United States, but it faced challenges due to regulatory opposition. The decision is seen as a victory for the Biden Administration, which has taken a tough stance on aviation sector consolidations, emphasizing consumer interests and avoiding potential increases in ticket prices.
The cancellation marks a setback for both airlines, with Spirit hoping the deal would ensure its survival. JetBlue CEO Joanna Geraghty acknowledged the slim probability of obtaining regulatory approval by the required July 24 deadline, even if the ruling were overturned on appeal. As part of the cancellation, JetBlue will pay Spirit $69 million, and the termination underscores the challenges and regulatory scrutiny in the aviation industry.