The deal failed to get the support of Spirit's shareholders.
At a special shareholders meeting on Wednesday, it was announced that the proxy vote on a merger with Frontier Airlines had been abandoned.
The failed merger was caused by a concerted effort by the airlines to convince investors to reject the Frontier deal. The vote was delayed four times since June.
The proposal was supported by the board of directors. The future of the airline is uncertain.
Ted Christie, CEO of Spirit Airlines, said that they are proud of their team members who worked on the transaction over the past few months. As we pursue the best path forward for Spirit and our stockholders, the board of directors will continue their discussions with JetBlue.
The two airlines haven't reached a merger agreement yet, despite a number of offers by the other. If the merger were to be blocked by the Justice Department, there would be a $400 million breakup fee and $33.50 in cash per Spirit share.
The management of Spirit believes that regulatory denial is likely because of the Justice Department's lawsuit.
The management team has argued that the lack of ultralow-cost carriers in the US would cause antitrust regulators to askance.
George Ferguson said that the management of Spirit will have little choice but to work on a deal with the airline.
He said it was hard to imagine management working against the will of the shareholders.
The merger agreement was signed on February 7. The carriers said that they would be the fifth-largest US carrier with more than 1,000 flights per day. The combined airline would be able to compete against the higher cost major airlines. $500 million in annual operating cost efficiency would be unlocked by the merger.
On April 5, JetBlue made its first competing bid, saying that a Spirit purchase would be a game-changer in its plans to expand from an East Coast-focused airline to one that operates on a national scale.
It would be more logistically challenging than a Frontier-Spirit combination because of the different business models of both airlines.
Frontier and Spirit planes are laid out in the same way as mainline U.S. competitors.
The investors decided that Frontier's offer was not rich enough. At the start of Wednesday's trading day, Frontier's combined cash-and-stock offer was worth about $25 per share.
Bill Franke, Frontier's board director and managing director of the airline's largest shareholder, said that the Frontier board took a disciplined approach to its negotiations with Spirit.
We prioritized consumers and the best interests of Frontier, our employees and shareholders in order to offer the appropriate value for Spirit. Frontier is well positioned to deliver significant value to our shareholders as we serve the growing demand for affordable air travel.
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