JetBlue Reaches Deal to Acquire Discount Carrier Spirit Airlines

If the proposed acquisition of Spirit Airlines by JetBlue gets regulatory approval, it will lead to the creation of the fifth largest airline in the United States. 

American low-cost airline and the seventh largest airline, JetBlue Airways Corporation (NASDAQ: JBLU) has reached a deal to buy up one of its closest competitors, Spirit Airlines Incorporated (NYSE: SAVE) in what will be one of the US’s biggest carrier acquisition in recent times.

As reported by CNBC, the announcement of this proposed acquisition came after the end of the merger agreement between Spirit Airlines and Denver, Colorado-based budget airline, Frontier Group Holdings Inc (NASDAQ: ULCC). With JetBlue now seizing the opportunity, it plans to offer $33.50 a share in cash for the Spirit acquisition, up from the $24.30 the shares closed at after Wednesday’s trading session.

The proposed acquisition will be subject to regulatory approvals, which many believe may be hard to get seeing how much the Justice Department is on JetBlue’s tails with respect to its earlier agreement with American Airlines Group Inc (NASDAQ: AAL). The Justice Department launched a lawsuit to block the deal last year, and the inconsistencies in its relationship with regulators are casting doubts on the current proposed acquisition of Spirit Airlines.

The investors of the two companies involved are reacting to the news in different ways. While there is a bullish growth in the shares of Spirit Airlines which is trading at 4.53% in the Pre-Market to $25.40, JetBlue shares have grown marginally by 1.19% to $8.50.

What Happens When JetBlue Acquires Spirit Airlines

Should the proposed acquisition of Spirit Airlines by JetBlue scale regulatory approval, it will lead to the creation of the fifth largest airline in the United States.

While American travelers love budget airlines like JetBlue and Spirit Airlines, the American market is still largely enamored with the biggest players. These include American Airlines, Delta Air Lines, Inc (NYSE: DAL), United Airlines Holdings Inc (NASDAQ: UAL), and Southwest Airlines Co (NYSE: LUV) respectively.

Should JetBlue succeed in acquiring Spirit Airlines, the combination of resources, expertise, and customer base will finally position it right to join the competition in a market dominated by these firms.

The new offer extended to Spirit Airlines was welcomed with the end of the merger agreement from Frontier. Prior to this time, Spirit Airlines has been reportedly pessimistic about the deal, however, the firm said it is now committed to continuing discussions with JetBlue to find a suitable deal that benefits all parties involved.

The acquisition is also bound to help open new access for JetBlue with respect to getting its hands on new Airbus jetliners and pilots, both of which are in short supply given the current state of the economy.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

Source: https://www.coinspeaker.com/jetblue-acquire-spirit-airlines/