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Spirit Airlines shares soar 20% after report says JetBlue made bid

Spirit Airlines planes on the tarmac at Fort Lauderdale-Hollywood International Airport on February 07, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

Shares of Spirit Airlines jumped more than 22% on Tuesday after a report that JetBlue Airways made a bid for the budget carrier, raising questions over Spirit’s deal to combine with rival budget carrier Frontier Airlines.

Spirit confirmed after the market closed on Tuesday that JetBlue had made an unsolicited offer.

JetBlue’s offer, reported earlier by The New York Times, comes less than two months after Spirit and Frontier agreed to merge into a giant budget airline.

Spirit said its board of directors is evaluating JetBlue’s proposal and “will pursue the course of action it deems to be in the best interests of Spirit and its shareholders.”

Competition for Spirit shows a renewed appetite for consolidation in the airline industry as it emerges from two tough pandemic years that have hurt travel demand. Carriers are now scrambling to hire to meet a rebound in travel.

A wave of consolidation that began more than a decade ago left four major airlines controlling more than 70% of the US market.

Trading in Spirit was halted before the market closed. Its shares were at $26.93. JetBlue offered $33 per share in its all-cash offer, according to Spirit.

JetBlue and Frontier did not immediately comment to CNBC.

JetBlue shares closed down around 7%.

Spirit and Frontier only fly Airbus A320 family aircraft. These make up the majority of JetBlue’s fleet, which would reduce the costs and logistical headaches of combining carriers.

However, JetBlue has a partnership with American Airlines that allows carriers to coordinate service in the northeastern United States. Both airlines said the deal would give them a better chance to compete with United and Delta Air Lines at crowded airports in New York and Boston.

The Justice Department filed a lawsuit to block the partnership last year.

American declined to comment on JetBlue’s offer for Spirit.


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