Spirit Airlines has backed out of a merger agreement with Frontier Airlines which would have made the combined tie-up the 5th largest airline.
The announcement ends a months-long courtship in which Frontier had been aggressively pursuing the budget carrier known for its no-frills approach to air travel.
In February, Spirit and Frontier announced their plans to merge. This would have created the fifth largest airline in the United States.
However, JetBlue countered with an all-cash bid of $3.6 billion that Spirit rejected. In May, JetBlue made a hostile takeover bid for Spirit Airlines and continued to increase its offer. This created a bidding war of sorts for the budget airline.
“While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our Team Members on the transaction over the past many months,” Spirit Airlines CEO Ted Christie said in a statement. “Moving forward, the Spirit Board of Directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders.”
Now with Frontier out of the running, this seemingly paves the way for JetBlue to potentially come in and buy the airline. The pull-out by Spirit is a surprise, as both airlines' shareholders still need to approve the deal with JetBlue, and there have been concerns about regulators allowing it.
Spirit has raised concerns about JetBlue's involvement with the North American Alliance with American Airlines which combines JetBlue’s and American’s services in New York City and Boston.