JetBlue just said they are backing out of a deal to buy Spirit Airlines.
The Justice Department says that Spirit Airlines would have to pay more for tickets if they weren’t independent. Spirit Airlines has been a popular way to fly because of their low prices. However, they do charge extra for extras like carry-on luggage.
The deal was blocked by a judge, but both companies later took back their appeals and agreed that they would not be able to go through with the deal while the legal problems were being worked out. JetBlue paid Spirit Airlines $69 million to end the deal as part of the deal.
Blue CEO Joanna Geraghty said, “Given the obstacles that still need to be cleared, we all agreed that it would be best for both airlines to move forward on their own.”
“We are disappointed we cannot move forward with a deal,” said Ted Christie, CEO of Spirit Airlines. “However, we remain confident in our future as a successful independent airline.”
Spirit companies has had money problems for years, and they haven’t been able to get back on track after the pandemic, even though other companies have. This choice not to buy out Spirit Airlines could hurt the airline and lead to its liquidation or failure.
So, JetBlue had already talked about backing out of the deal in January, when they learned Spirit Airlines wasn’t worth the $3.8 billion they were going to pay for it.
