Spirit and Frontier Airlines recently announced an adjusted merger agreement. Meanwhile, JetBlue seems to be taking one step back in progress with its offer for Spirit.
According to a Spirit press release, the Board of Directors for the company and its stockholders are backing this merger agreement with Frontier.
One of the main points under the new terms is that Frontier will increase its breakup fee to $350 million to Spirit in case the merger doesn’t happen.
Earlier this year, in February, Spirit and Frontier Airlines announced a plan to merge. Soon after, JetBlue countered with its own offer for Spirit.
In the release, a review was also done of JetBlue’s amended proposal to acquire Spirit but they did not support this revised plan.
“After considering this review and discussions, Spirit’s Board of Directors determined JetBlue’s revised offer is not a Superior Proposal,” the release said.
Frontier Airlines’ chief executive officer Barry Biffle appeared on CNBC’s “Squawk on the Street this morning. He said that a merger between his company and spirit would be better for consumers to keep low costs. He stated a deal with Spirit and JetBlue would raise costs for consumers.
Earlier this year, some senators came out in opposition to a merger between Frontier and Spirit Airlines. One of the main points is the merger between these two companies would reduce competition in the industry.
“Today, four airlines—American, Southwest, Delta, and United—control 80% of the domestic market, cementing their dominance through recent mergers including Delta-Northwest in 2008, United-Continental in 2010, and American-US Airways in 2013.”
For now, the triangle between Spirit Airlines, Frontier Airlines and JetBlue Airways continues.