Spirit and Frontier Airlines throw out merger agreement

CNBC reported that the proposed merger between Spirit and Frontier Airlines has been thrown out, leaving room for another airline to swoop in and get a deal. The Washington Post reported that the deal was expected to be rejected by shareholders because of the higher offer.

The merger of Frontier and Spirit would have created the fifth largest airline in the US. It wasn't everything that went as planned, as JetBlue countered Frontier's initial $2.9 billion offer with an attractive all-cash $3.6 billion bid. JetBlue launched a hostile takeover of Spirit Airlines in May and kept trying to increase its offer.

Ted Christie, president and CEO of Spirit Airlines, said in a statement that they are proud of the dedicated work of their team members on the transaction. As we pursue the best path for Spirit and our stockholders, the Spirit Board of Directors will continue their discussions with JetBlue.

It is not clear where things will go from here, as Spirit shareholders still need to approve the deal with JetBlue, and even then, Spirit executives aren't sure regulators would allow it. The North American Alliance is a partnership that combines the services of two airlines in New York and Boston.

The Department of Justice believes that the NEA could hurt the airline industry by making it harder for passengers to board connecting flights. In September of last year, the DOJ filed an antitrust complaint against the NEA, arguing that it harms passengers by merging the airline industry.