Attorney General Merrick Garland on Tuesday announced a lawsuit seeking to block the $3.8 billion JetBlue-Spirit Airlines merger, saying it would limit consumer choice and drive up fares. I made it.
Spirit Airlines announced it would sell several aircraft and lay off employees as the beleaguered airline seeks to raise cash.
The ultra-low-cost carrier, whose planned merger with JetBlue was blocked by regulators this year, plans to cut costs by about $80 million a year in a filing with the Securities and Exchange Commission (SEC) on Thursday. revealed. It will be implemented next year.
These cost savings will primarily come from “employee reductions commensurate with the company’s anticipated operating volume,” Spirit said in the filing. The company did not disclose the number of reductions.
A Spirit Airlines aircraft prepares for departure at Austin-Bergstrom International Airport in Austin, Texas, on February 12. (Brandon Bell/Getty Images/Getty Images)
The company also said in the filing that it has agreed to sell 23 A320ceo/A321ceo aircraft to GA Telesis for approximately $519 million.
JetBlue and Spirit agree to halt merger due to regulatory issues
The company estimates that the net proceeds from this sale, combined with the removal of aircraft-related debt from its balance sheet, will increase liquidity by approximately $225 million by the end of 2025.
Spirit said its production capacity in the third quarter of 2024 was down 1.2% year over year, and the company expects its production capacity in the fourth quarter of 2024 to be down approximately 20% year over year.
A traveler approaches the Spirit Airlines check-in desk at George Bush Intercontinental Airport in Houston on November 21, 2023. (Jason Voigtman/Houston Chronicle via Getty Images/Getty Images)
Despite a failed merger plan with JetBlue, Spirit is still looking to rebuild. According to the Wall Street Journal, the airline has reignited merger talks with Frontier Airlines as it continues to discuss a potential bankruptcy filing.
Judge blocks $3.8 billion JetBlue-Spirit merger citing ‘anticompetitive harm’
Sources told the Journal that negotiations between Spirit and Frontier are in the early stages and a deal may not be reached.
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A federal judge blocked JetBlue’s acquisition of Spirit in January, agreeing with the Justice Department that it would harm access to cheap airline tickets.
The airlines argued that this would save consumers hundreds of dollars and create a low-fare, high-value competitor to America’s “Big Four” airlines.
