JetBlue and Spirit Airlines announced on Friday that they will be appealing a federal judge's ruling, which recently blocked their plan to merge and create a single carrier. The two airlines have filed a notice of appeal with the 1st U.S. Circuit Court of Appeals, as per the terms of their agreement.
The lawsuit filed by the Justice Department aimed to prevent JetBlue's proposed $3.8 billion acquisition of Spirit, citing concerns over potential harm to consumers and increased fares if the merger were to proceed. The deal was seen as JetBlue's strategy to enhance competition against larger airline competitors, with Frontier Airlines being outbid in the process.
However, a federal judge in Boston ruled on Tuesday that the proposed merger violated antitrust laws. The ruling stated that the elimination of Spirit, the country's largest discount airline, would negatively impact consumers. Consequently, JetBlue and Spirit have decided to challenge the decision.
The airlines released a statement announcing their intention to appeal but did not provide further details. The Justice Department, on the other hand, declined to comment on the matter.
In a separate development, Spirit Airlines reported that its fourth-quarter revenue received a boost from a strong holiday-travel season in December. The Miramar, Florida-based carrier also revealed plans to refinance $1.1 billion in debt due for payment in September 2025.
Furthermore, Spirit indicated that negotiations with Pratt & Whitney regarding engine rework had significantly progressed since October. The airline has been dealing with grounded planes as a result of the necessary engine modifications, which has affected an average of 26 aircraft daily throughout 2024. Spirit expects compensation from Pratt & Whitney, which will provide a substantial source of liquidity over the next couple of years.
Notably, Spirit Airlines has faced financial losses since the beginning of 2020, leading some analysts to suggest that without the merger with JetBlue, the company could face bankruptcy.
Following the announcement of the appeal, Spirit's stock rose by 17% in regular trading on Friday, recovering from a 62% drop over three days following the court ruling. JetBlue's shares, however, experienced a 2% decline in extended trading.
The appeal process will now be heard by the 1st U.S. Circuit Court of Appeals, where the fate of the proposed merger between JetBlue and Spirit Airlines will be decided.
