video Airlines overscheduling flights contributing to cancellation ‘mess’: Fmr. Spirit Airlines CEO
Former Spirit Airlines CEO Ben Baldanza says greater coordination is needed in the airline industry to prevent overscheduling to meet demand as thousands of holiday flights are canceled or delayed due to weather and staff shortages.
Spirit Airlines will continue possible merger discussions with JetBlue after walking away from a merger agreement with Frontier Airlines. Shares of the three airlines were little changed in after hours trading following the announcement.
"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," Spirit CEO Ted Christie said in a statement.
JetBlue Airways plane on runway. (iStock) (Istock / iStock)
Frontier Chair William Franke said: "While we are disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination, the Frontier Board took a disciplined approach throughout the course of its negotiations with Spirit. We were focused on offering the appropriate value for Spirit, while prioritizing consumers and the best interests of Frontier, our employees and shareholders."
Franke added that his airline remains well-positioned to deliver significant value to shareholders while servng the growing demand for affordable air travel.
Frontier reported Wednesday that operating revenue rose 43% to $909 million compared to the pre-COVID second quarter of 2019.
Frontier and JetBlue have been in a months-long bidding war for the rival ultia-low-cost carrier headquartered in Miramar, Florida.
Ticker Security Last Change Change % SAVE SPIRIT AIRLINES INC. 24.30 +0.92 +3.93% JBLU JETBLUE AIRWAYS CORP. 8.40 +0.29 +3.58% ULCC FRONTIER GROUP HOLDINGS 11.27 +0.68 +6.42%
Spirit shareholders had been deliberating between a stock-and-cash offer from Frontier worth about $22 per share, or $2.4 billion, that would give Spirit shareholders 48.5% of the combined airline and a hostile bid from JetBlue worth $33.50 per share, or $3.6 billion.
The bidding war for the largest U.S. budget carrier started in February after Frontier Airline's parent company, Frontier Group Holdings, and Spirit announced a definitive merger agreement "under which the companies will combine, creating America’s most competitive ultra-low fare airline."
JETBLUE WILL NOT BACK DOWN, CONTINUES ITS FIGHT FOR SPIRIT AIRLINES
In the announcement, Frontier touted that consumers would save millions by getting more ultra-low fares to more cities.
A Frontier Airlines airplane taxis past a Spirit Airlines aircraft at Indianapolis International Airport in Indianapolis, Indiana on Monday, Feb. 7, 2022. (Luke Sharrett/Bloomberg via Getty Images / Getty Images)
Spirit Airlines said in April that it received an "unsolicited proposal" from JetBlue to purchase all outstanding shares of Spirit's stock to break up the potential merger. At $33 per share, the offer represented a 50% premium to Spirit’s closing share price on the day before the announcement.
Although JetBlue's original bid was rejected, the company persisted, offering several revised proposals since then.
Both airlines repeatedly tried to persuade the budget carrier to reject the competing bid and issue statements why their airline would provide greater value to shareholders and customers.
A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images / Getty Images)
The decision wasn't an easy one for Sprit, which delayed a vote on the proposed merger with Frontier twice to continue merger talks between its shareholders and the two competing airlines.
"Unlike the compelling Spirit-Frontier combination, an acquisition of Spirit by JetBlue, a high-fare carrier, would lead to fewer options and more expensive travel for consumers," Frontier announced in a public note to Spirit shareholders in May.
SPIRIT SHAREHOLDERS URGED TO VOTE FOR SWEETENED FRONTIER OFFER
Meanwhile, JetBlue told Sprit shareholders in June that if they wanted "more value and more certainty, sooner," then they should vote "against the Frontier transaction."
JetBlue CEO Robin Hayes has previously argued that a "JetBlue-Spirit transaction would create a true national competitor to the Big Four and deliver value to all of our stakeholders" while delivering "lower fares and a better experience to more customers."
CLICK HERE TO READ MORE ON FOX BUSINESS The Associated Press contributed to this report.
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