Spirit Airlines is at the Center of a Love Triangle

Spirit Airlines officially rejected a $3.6 billion cash takeover bid from JetBlue yesterday, opting instead to stick with its original plan to merge with rival Frontier.

✈️ More deets… Frontier and Spirit announced plans to merge back in February, finally becoming Insta-official after years of being that on-again off-again couple, per securities filings.

JetBlue’s offer for Spirit, updated on Friday, came with a higher price tag than Frontier’s cash-and-stock offer, which was originally valued at $2.9 billion. So why opt to tie the low-budget, lower-priced airline knot instead?

Put simply, Spirit thinks regulators would block a merger between it and JetBlue. Two quick things:

• #1: It pointed to JetBlue’s alliance with American Airlines Group in New York and Boston as a particular area of concern, per a letter from both Spirit’s Chairman Mac Gardner and CEO Ted Christie to JetBlue CEO Robin Hayes. The DOJ has challenged that arrangement and is suing to block it.
• #2: JetBlue has marketed itself more as a premium airline, offering perks like free Wi-Fi and upgraded snacks. Spirit believes officials “will be very concerned that a higher-cost/higher fare airline would be eliminating a lower-cost/lower fare airline in a combination that would remove about half of the ULCC (ultra low cost carrier) capacity in the United States.”

👀 Looking ahead… JetBlue said yesterday that it’s not giving up hope, making the details of its latest offer public in an effort to win over Spirit shareholders. Shares of Frontier fell 3.8%. Spirit shares fell 9.4% and JetBlue rose 2.6%.