Spirit Airlines Inc. said late Wednesday it has ended its merger agreement with Frontier Group Holdings Inc. and will continue “discussions” with JetBlue Airways Corp., which doggedly pursued the ultra low-cost airline after it had made arrangements with Frontier.
Spirit SAVE, +3.93% is “disappointed that we had to terminate our proposed merger with Frontier,” the airline’s Chief Executive Ted Christie said in a short statement.
Spirit and Frontier ULCC, +6.42% announced their deal in February, with JetBlue JBLU, +3.58% entering the fray in April. Both Frontier and JetBlue have since upped their offers for Spirit, battling it out for a chunk of the booming leisure air-travel market amid pent-up demand after years pandemic-related travel restrictions.
“Moving forward, the Spirit board of directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders,” Christie said.
The Wall Street Journal reported Wednesday night that JetBlue is closing in on a deal to buy Spirit, and a deal could be announced as soon as Thursday.
Frontier said Wednesday it was “disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination.”
The company enters a “next chapter … well-positioned to deliver significant value to our shareholders as we serve the growing demand for affordable air travel,” Frontier said, announcing it was offering 1 million fares costing $19 each way.
“No one is as cheap as Frontier,” it said.
JetBlue did not immediately release a statement.
Shares of JetBlue were flat in the extended session after ending the regular trading day up 3.6%. Spirit shares gained 2% after hours, after advancing 3.9% at the close. Frontier shares slipped 1.3% after closing 6.4% higher.