Frontier Calls JetBlue Bid a “Dead End”

The complexities and intrigues of a deal that would create America’s fifth-largest airline have taken an ignoble turn. 

Pursuant its likely merger with Spirit Airlines, Frontier Group Holdings, Inc., parent company of Frontier Airlines, issued a statement accusing JetBlue of prevarication, bluster, and predatory fraud. 

JetBlue, which has repeatedly tendered merger offers of its own to Frontier Group, vehemently opposes the Spirit/Frontier alliance as the resultant hybrid entity would—in words taken directly from JetBlue’s 2021 10-K statement—“the Frontier/Spirit deal is a threat to JetBlue’s “competitiveness”—and an example of a merger that “could cause fares of our competitors to be reduced.”

JetBlue’s ongoing efforts to derail the Frontier/Spirit merger are predicated primarily upon shaking investor confidence with allegations that the deal, if finalized, would violate antitrust laws. 

Frontier Group’s statement refutes JetBlue’s claims, and assures investors: “Our transaction will increase output and reduce prices by bringing ultra-low fares to more routes in competition with larger, higher cost, higher fare airlines. A combined Frontier and Spirit will stimulate demand by inducing people to fly when the high fares offered by JetBlue and the Big Four would otherwise price them out of the market.”

JetBlue’s antitrust arguments have been widely panned by analysts who note that the airline is already in federal court facing DOJ accusations of antitrust violations stemming from the carrier’s so-called Northeast Alliance with American Airlines. Airline industry and financial pundits alike posit the Frontier/Spirit combination has synergies and a pro-competitive narrative that the JetBlue/Spirit bid lacks. 

Spirit Airlines has leveled its own antitrust allegations against JetBlue, stating that JetBlue’s bid to acquire Frontier is a predatory undertaking by which the former would effectively rid itself of a primary competitor in the low-fare air-travel market. 

“JetBlue is not telling you the truth,” the Frontier Group’s statement asserts. “A Spirit acquisition by JetBlue would lead to a dead end—a fact that no amount of money, bluster, or misdirection will change. And the only value Spirit stockholders would be likely to receive from JetBlue’s proposal is the reverse termination fee, because JetBlue’s proposal lacks any realistic likelihood of obtaining regulatory approval.”

FMI: https://www.flyfrontier.com, https://www.spirit.com