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Spirit Airlines shareholders voted on Wednesday to approve a $3.8 billion takeover from JetBlue Airways, but the deal might still face a federal antitrust review.

JetBlue won a bidding war with Frontier to purchase Spirit, the nation’s largest budget airline.

Spirit revealed the decision following a quick online meeting. Spirit only stated that the JetBlue transaction was backed by a majority of votes cast; it promised an accurate count within four business days.

Shareholders were largely anticipated to accept the deal after forcing Spirit to abandon a proposed merger with Frontier Airlines in favor of JetBlue’s richer, all-cash offer.

“This is a significant step forward on our approach to completing a merger that will create the most appealing national low-fare alternative to the leading US airlines,” Spirit CEO Ted Christie said following the vote.

The decision, according to JetBlue, was “a critical milestone in our goal to merge with Spirit to establish a high-quality, low-fare national rival to the Big Four airlines” — a reference to American, United, Delta, and Southwest. JetBlue has promised to follow the regulatory process.

JetBlue plans to repaint Spirit planes and integrate Spirit pilots and other staff into the JetBlue crew. With more than 450 planes and almost 7,000 pilots, the merger would elevate New York-based JetBlue to the nation’s fifth-largest airline, allowing it to compete with the larger carriers.
It would, however, remove Spirit, the nation’s largest budget carrier, which may not sit well with regulators, who look to be opposed to further airline consolidation following a spate of mergers between 2005 and 2016.

The Justice Department is presently battling to demolish a JetBlue-American collaboration between New York and Boston known as the Northeast alliance, or NEA. According to Department attorneys, the collaboration is anti-competitive and will raise consumer costs. A federal court trial in Boston that began last month will resume on Monday.

According to Florian Ederer, an antitrust specialist and Yale University economics professor, the outcome of the NEA trial might have a significant effect on whether the Justice Department allows JetBlue to purchase Spirit or sues to prevent the acquisition.

“If (JetBlue and American) win the lawsuit and the judge believes the NEA does not affect consumers sufficiently, it’s almost certain that the Spirit merger will face an antitrust challenge,” Ederer said.
JetBlue contends that the partnership with American should be permitted since it is not a merger. The acquisition of Spirit, on the other hand, would result in the merger of two airlines.
JetBlue CEO Robin Hayes has stated that he is sure that the acquisition of Spirit will be approved by regulators. The airlines expect to complete the transaction in the first half of 2024.

In February, Spirit and Frontier announced their intention to join. Both are ultra-low-cost carriers, which charge cheaper rates than conventional airlines but add extra levies to make up the difference.

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