UPDATE – JetBlue CEO Robin Hayes is confident that his airline is closing in on a successful transaction to buy Spirit Airlines. He is happy that JetBlue has finally got a fair chance to review Spirit’s financial information after the Spirit Board has given both Frontier Airlines and JetBlue equal access. JetBlue now happy it has a fair chance to look at Spirit.

“We now have the same access that Frontier has had, or that is what we have been told. What you are seeing now are the benefits of a competitive process that should have run in the first place. Both Frontier’s new offer and our offer are better than the offer they had originally. It indicates our position that should have run a competitive process from the beginning”, JetBlue CEO Robin Hayes said in Doha on the sidelines of the IATA Annual General Meeting. JetBlue upped its offer for Spirit once again on Monday, now offering $33.50 per share (up $2 over the June 6 offer) or an aggregate $3.6 billion.

“Let’s see how it goes. It is a process that we are putting a lot of effort into and we want to get to a successful outcome. (..) Our bid is so superior, that they have to raise it a lot close to ours. Let’s see what happens.” Spirit postponed the stockholder meeting to decide on the offer from June 10 to June 30.

Hayes stressed that the Northeast Alliance with American Airlines, which is questioned by Spirit’s Board as being realistic, and the offer on Spirit are two different things: “The NEA is nailing JetBlue to growth in the Northeast. The Department of Justice knows of the ‘JetBlue effect’ (which means that where JetBlue enters the market, fares go down – RS). The Spirit deal is really allowing to grow us outside the Northeast. We have offered unprecedented divestitures in the Northeast, so the post-JetBlue-Spirit deal means we will be no bigger than before.” JetBlue included updated disvestitures into its updated offer and exceeds that of Frontier.

Hayes repeated that JetBlue is keen to acquire Spirit because of its order backlog with Airbus, which would allow it to ‘turbocharge’ its growth not possible now as Airbus is sold out until 2027 on the A320neo family. “It is really about creating a national low-fare challenger with the bigger customer base. Second is access to the order book: our combined order book will have a transformation effect on our ability to grow in a more sustainable way. Third is getting access to infrastructure, gates at congested airports to allow JetBlue to be bigger at markets like Los Angeles, where we could have a good effect on competition. And also access to an incredibly trained labor force.”

JetBlue plans to finance the acquisition with cash: “We have a significant amount of unencumbered assets, it is no challenge for us.”  

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Richard Schuurman
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Active as journalist since 1987, starting with regional newspaper Zwolse Courant. Grand Prix reporter in 1997 at Dutch monthly Formule 1, general reporter Lelystad/Flevoland at De Stentor/Dagblad Flevoland, from 2002 until June 2021 radio/tv reporter/presentor with Omroep Flevoland.
Since mid-2016 freelance aviation journalist, since June 2021 fully dedicated to aviation. Reporter/editor AirInsight since December 2018. Contributor to Airliner World, Piloot & Vliegtuig. Twitter: @rschuur_aero.

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