BREAKING: Spirit Airlines Rejects JetBlue Bid in Favor of Frontier Merger

The spirit has spoken. The preferred partner is Frontier. The airline isn't done yet.

Edward Russell.

The merger with Frontier Airlines is still being pursued by Spirit Airlines, even though it turned down the offer from JetBlue Airways.

Some aviation circles were a bit surprised by the counter-offer made by JetBlue for Spirit.

In a letter to the airline, the CEO of the discount carrier said that he did not believe the Department of Justice would be persuaded to allow the acquisition.

The airline is not out. In a separate statement Monday, the New York-based airline said it would sell all of the assets of Spirit in Boston and New York as well as some gates in Fort Lauderdale in order to pass. The break-up fee was increased to $200 million. The alliance with American Airlines in the northeast was seen as a competitive remedy for the proposed merger.

The terms of the offer of $33 per share for Spirit by JetBlue are the same as Frontier's offer of an implied value of $25.83 per share.

The transaction would create a national competitor to the Big 4 airlines and would deliver benefits for customers and shareholders.

The U.S. Big 4 are American, Delta Air Lines, Southwest Airlines, and United Airlines. The data from the U.S. Bureau of Transport Statistics shows that they carried 80% of domestic travelers.

Frontier could emerge as the winner in the bidding war for Spirit, according to analysts. Either the Denver-based budget airline gets Spirit as the takeover targets board has affirmed, or it emerges as the only large deeply-discount fare airline in the U.S.

A Frontier-Spirit merger would create an airline with a just under 8 percent share, according to data.

Frontier wasn't available for comment.

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