JetBlue’s Acquisition of Spirit and the Anticompetitive Effects

BY: Alex Bonomo, RBFL Student Editor

The battle for Spirit began in February 2022, when Frontier made a cash-and-stock offer for Spirit, valued at $2.9 billion.[1] Both companies’ boards of directors adopted their merger agreement on February 5, 2022.[2] On February 7, 2022, Frontier and Spirit announced their agreement,[3] leading to JetBlue’s announcement of its unsolicited, all-cash $3.6 billion offer to buy all of Spirit’s outstanding shares on March 29, 2022.[4] JetBlue’s proposal valuing Spirit at $33 per share represented a 37% premium over Frontier’s offer.[5] However, for the proposal to be considered “Superior” according to the terms of the Frontier merger agreement, “it must be ‘reasonably capable of being consummated . . . taking into account all financial, regulatory, legal and other aspects of such Acquisition Proposal.’”[6]

The Spirit board of directors determined that JetBlue’s proposal was not Superior to Frontier’s on the basis that it wasn’t reasonably capable of being consummated.[7] The Spirit board of directors remained headstrong that Frontier’s proposal “represented the best opportunity to maximize value for the Spirit stockholders.”[8] Despite the attempted reassurance, the Spirit board’s dismissal of JetBlue’s bid was met with resistance, kicking off a months-long battle to obtain Spirit’s shareholders’ support.[9]

The battle ended when Frontier recognized that it could not beat JetBlue’s offer. On July 27, 2022, Spirit terminated the Frontier merger agreement. [10] The bidding war led JetBlue to pay $1 billion more than Frontier’s initial offer.[11]

The four largest carriers—American Airlines, United, Delta, and Southwest (collectively, the “Big Four”)—control more than 80% of the market.[12] Given the current oligarchy over the airline industry, there has been strong opposition to the proposed JetBlue-Spirit merger, with law makers arguing that fewer airlines is the exact opposite of what the industry needs. [13] Regulatory approval will not come easy, and JetBlue will likely have to give up divestments to mitigate the anticompetitive effects of the deal. The Department of Justice (“DOJ”) will be vigilant in reviewing the proposal. Whether this combination can pressure the Big Four to lower airfares will be telling as to what’s to come for the airline industry.

[1] Frontier Groups Holdings Inc., Current Report (Form 8-K) (Feb. 7, 2022)

[2] Id.

[3] Id. at 69.

[4] Id.

[5] Press Release, Business Wire, JetBlue Submits Superior Proposal to Acquire Spirit, Positioning America’s Much-Loved Airline as the Most Compelling National Low-Fare Challenger to the ‘Big Four’ Airlines (Apr. 5, 2022),

[6] Spirit Airlines, Inc., Proxy Statement (Form DEFMA14A) 61 (May 11, 2022)

[7] Id. at 71.

[8] Id.

[9] Frontier Groups Holdings, Inc., The following press release is being filed in connection with the proposed business combination of Spirit Airlines, Inc. (“Spirit”) and Frontier Group Holdings, Inc. (“Frontier”): (Form 425) (June 27, 2022),; Spirit Airlines, Investor Presentation (May 25, 2022),

[10] Dhierin Bechai, JetBlue And Spirit Airlines Write History, Frontier Airlines Stock Surges, Seeking Alpa (July 28, 2022, 1:45 PM),

[11] Dhierin Bechai, JetBlue And Spirit Airlines Write History, Frontier Airlines Stock Surges, Seeking Alpa (July 28, 2022, 1:45 PM),

[12] Chris Isidore, This is a great time to be an airline. It’s the worst time to be a passenger, CNN Business, (Aug. 4, 2022),; Salas, Leading airlines in the U.S. by domestic market share 2021, Statista (July 27, 2022),

[13] Letter from Elizabeth Warren, U.S. State Senate, to the Honorable Pete Buttigieg, Secretary of U.S. Department of Transportation (“DOT”) 3 (Sep. 15, 2022)

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