Spirit Airlines rejects JetBlue offer for Frontier merger
Yahoo Finance's Brian Sozzi and Julie Hyman report that Spirit Airlines is sticking with the planned Frontier deal after rejecting a competing offer from JetBlue.
Video Transcript
BRIAN SOZZI: All right, a little more exciting here, Julie. Let's switch gears and let's talk some airlines. Spirit Airlines has rejected that JetBlue bid. They are staying with Frontier. And this makes sense, Julie. Of course, JetBlue made a strong case here initially in trying to go out there and buy Spirit. But this was going to be a very, very tough sell for regulators. There's nothing more that regulators love to tweet about and attack than airline mergers and the potential for higher prices on consumers. There was just really no way for this deal likely to get through. That is JetBlue and Spirit.
JULIE HYMAN: So Spirit and Frontier maybe still have a better bet here. I mean, $33 is what the offer is on the table from JetBlue. JetBlue has said it would, quote unquote, "enhance its offer" by offering a divestiture commitment and a reverse breakup fee, but as you say, it is not enough as of yet to tempt Spirit away from its tie-up with Frontier Airlines. You know, that tie-up, by the way, may still well get some antitrust scrutiny, right? Or at least, they're going to examine that to see if it does indeed make sense for consumers.
We've talked about it a little bit, right, that effectively, what JetBlue is trying to get at is Spirit's fleet. It's tough to get aircraft right now. And so that's one of the ways it is trying to do so. So the other question now is if it does not succeed in buying Spirit-- and right now, it doesn't look like it's going to-- where, then, is it going to get those planes?
BRIAN SOZZI: Well, hopefully, from a Boeing or an Airbus at some point. But look, if Spirit and JetBlue were to merge, they would have a very large stronghold, Julie, in the Florida market here. And that would be a real tough sell for regulators. They would essentially operate or dominate Florida. And I think that would get a lot of scrutiny.
JULIE HYMAN: Yeah, most definitely.
