JetBlue has filed a proxy statement and launched a website urging Spirit Airlines shareholders to vote against a proposed merger between Spirit and fellow ultra-low-cost carrier Frontier Airlines. Spirit rejected a competing purchase offer from JetBlue earlier this month, citing a low probability of obtaining antitrust clearance. According to JetBlue, its latest offer, made on May 13, is about 60 percent higher than Frontier’s bid.
“JetBlue offers more value—a significant premium in cash—more certainty, and more benefits for all stakeholders,” JetBlue CEO Robin Hayes said in a letter to Spirit shareholders. “Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges.”
Spirit announced on Monday that its board of directors would review JetBlue’s May 13 offer and advise stockholders of the board’s official position within ten business days. As previously reported by AVweb, Spirit made its merger agreement with Frontier public in February 2022. Dependent upon regulatory reviews and stockholder approval, that deal was expected to close in the second half of the year.
Go Jet Blue! I still wonder if such a merger will pass anti-trust laws, but some lawyer at Jet Blue must believe this buyout will pass government scrutiny. If Jet Blue does come out with Spirit, I hope they remove the park benches in the Spirit Airbuses and put in real seats with a more reasonable pitch.
I totally agree. They feel like burlap slapped onto a milk crate.
If JetBlue ends up with Spirit it is for the purpose of a straight JetBlue product. The Spirit CEO (Ted) and the Board floating down on golden parachutes to probably enhance some South American ULCC’s (I made that part up).
So your tuckus is safe it will be JB seats, not ULCC seats.
My memory is in the mid 00’s Indigo Partner/Bill Franke purchased Spirit from Jacob Schorr, Ben Baldanza as CEO developed the ULCC model (which all passengers love prices/late product). Just before the 2010 Spirit CBA and pilot strike, Bill fires Ben.
Ben goes to JetBlue and works on “employee culture” and superior product. Does well.
Bill goes to Frontier and duplicates the ULCC ATM. Offers to merge with Spirit for something like a 2.1B dollar deal and promises Ted and and cronies a guaranteed five seats for Spirits Board on Bill’s Board.
Ben sees this, remembers getting fired, says screw you Bill, I’ll see your offer and raise you 1 Billion.
Spirit out of hand rejects the JB offer. Something about regulators and the NEA.
With everyone in a kerfuffle, the JB purchase deal goes to, wait for it, yes the forgotten Shareholders to vote on in June 2022.
Some additional observations:
1. The Frontier/ Spirit merger would be easy peasy operationally; same business model.
2. No one group seems wants to negotiate with or work for Frank Lorenzo, oops, I mean Bill Franke.
3. Those JB blue pilot shirts better come in XXXL size.
4. Lawyers are the real winners in this.
5. Billionaires don’t think like anyone who’s not a Billionaire, and my recollections are based on knowing Ned, and Schorr professionally (great guys, but just millionaires), having met AA’s infamous Fang for 10 minutes (treated me as a worker drone), Petzinger’s book Hard Landing influenced my insight into the mind set of these guys.
6. My heart goes out to the HQ, SOC, behind the scenes, lower level and Senior managers, number cruncher s and all the folks that have given their family planning and lives who are behind the scenes. Everyone from Crew Sked and Training scheduling, MOC to AOG desks, to purchasing, to the poor guy that has to his name on the bottom of a delayed bid displacement, who had nothing to do with the instructions to due it with 1999 software.
I know many of these folks for over 25 years and can’t imagine the kitchen table discussions happening for them. Six days a week, 10 hour days, married to the phone on weekends, and not even a lead parachute, just cya wouldn’t want to be ya.
All of my observations are strictly based on my memory and in no mean reflect negatively on any one entity, person, or confidential company correspondence.