JetBlue and Spirit Airlines are set to appeal a recent ruling that blocked their proposed merger, according to an announcement made on Friday. The airlines have filed a notice of appeal with the 1st U.S. Circuit Court of Appeals, following the terms of their agreement. The Justice Department, which had sued to block JetBlue’s $3.8 billion purchase of Spirit, has declined to comment on the matter.
JetBlue and Spirit are currently the nation’s sixth- and seventh-largest carriers, respectively. JetBlue had outbid Frontier Airlines for the acquisition of Spirit, stating that it needed to combine with the airline in order to effectively compete against larger carriers. However, on Tuesday, a federal judge in Boston ruled that the merger violated antitrust law. The U.S. Justice Department argued that consumers would be negatively affected and forced to pay higher fares if Spirit, the nation’s biggest discount airline, were eliminated.
In response to the ruling, JetBlue and Spirit released a statement announcing their intention to appeal. The statement did not provide any further details regarding their appeal. Prior to this announcement, Spirit Airlines had reported a boost in fourth-quarter revenue due to a strong holiday-travel season in December. The airline is also in the process of trying to refinance $1.1 billion in debt that is due for payment in September 2025.
Additionally, Spirit has been engaged in negotiations with Pratt & Whitney over engines that require reworking, resulting in an average of 26 planes being grounded per day throughout 2024. However, the airline stated that progress has been made since October and it expects compensation that will provide a significant source of liquidity over the next couple of years.
The potential merger with JetBlue is seen as crucial for Spirit, as the airline has been experiencing financial losses since the beginning of 2020. Some analysts have even suggested that without the merger, Spirit could face bankruptcy. Following the announcement of their intention to appeal, shares of Spirit experienced a significant increase in value. After falling 62% over three days following the ruling, the airline’s shares gained 17% in regular trading on Friday and rose an additional 13% in after-hours trading. On the other hand, JetBlue’s shares fell 2% in extended trading.
The decision to appeal the ruling reflects the determination of both JetBlue and Spirit Airlines to proceed with their merger plans. Despite the setback, the airlines remain committed to creating a single carrier that can effectively compete in the industry. The outcome of the appeal will have significant implications for the future of both airlines and the broader aviation market.
