The merger agreement between Frontier Airlines and Spirit Airlines was terminated by the airlines on Wednesday.
The New York-based airline spent weeks urging shareholders to reject the deal, though the shareholders were set to vote on the combination of the two airlines.
People familiar with the matter say that the shareholder support for the Frontier combination was lacking.
As it pursues the best path forward for the company and its stockholders, it will continue its discussions with JetBlue.
The country's fifth- largest carrier would be created by a combination of the two airlines.
The cancellation of the Frontier deal is a blow to the discount carriers. Four times, the shareholder vote on the merger was put off. Frontier CEO Barry Biffle said in a July 10 letter to his counterpart that the offer was its best and final one.
It's easier to get a takeover deal done with JetBlue now that the Spirit-Frontier deal has been terminated. Talks for a takeover of the airline are still going on.
William Franke, chair of Frontier's board and managing partner of Indigo Partners, said that the board took a disciplined approach to its negotiations with Spirit.
The board argued that it was unlikely that regulators would approve the takeover.
There is a chance that no deal is done. The Biden administration has vowed to crack down on consolidation, so the Justice Department had a hard time approving the transactions.
American, Delta, United and Southwest control about three-quarters of the domestic market.
The Justice Department sued to get rid of the alliance between American and JetBlue in the Northeast.
Frontier Airlines had a $13 million profit for the second-quarter, a decrease from last year. The carrier said higher costs offset a surge in revenue which came in at $909 million.
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