After the merger agreement with Frontier was terminated, the two airlines announced they were merging. There is an update on the merger.
The merger agreement has been approved by shareholders.
More than 50% of the outstanding shares of Spirit common stock voted in favor of the transaction based on preliminary voting results provided by the independent inspector of election. The final voting results of the special meeting will be reported to the SEC.
Ted Christie is the CEO of the airline.
“This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant U.S. carriers. We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to Team Members, Guests and stockholders.”
Getting shareholder approval is a major hurdle to overcome, but now the challenge is getting regulatory approval. The reason it was initially rejected was because of regulatory approval, but on paper it was better than Frontier.
We will see how that goes. It would be bad for consumers if ultra low cost carriers were eliminated. The combined airline could be a true competitor to the "big four" US carriers in terms of scale, helping to keep fares down.
It's anyone's guess how this will play out, but the two airlines are hoping to close the deal by the first half of the century. If the proposed agreement is not concluded for antitrust reasons, JetBlue will pay a reverse break-up fee of $70 million and shareholders of Spirit will be paid a reverse break-up fee of $400 million.
The airline has been a mess over the last couple of years, and hasn't been doing well financially. I don't think this is going to work out. Even if this is approved, the airlines would have to make significant concessions to regulators, and that's not good.
The takeover bid was approved by the shareholders of the company. The regulatory process that the airlines have to go through is expected to be finished by the year 2024. The two airlines have an uphill battle if this succeeds.
What do you think about the merger of the two airlines?
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