JetBlue makes massive offer to buy Spirit Airlines

JetBlue is making a move to buy Spirit Airlines and break up the announcement of the merger between the ultra low cost carrier and Frontier Airlines. Spirit reported yesterday April 5 that JetBlue offered $33 dollars per share which brings the offer to a grand total of 3.6 billion dollars. The Florida-based Spirit Airlines said its board is evaluating JetBlue’s offer.

To put it in perspective, the offer that JetBlue is making to buy Spirit has a value 40% higher than the offer made by Frontier. That offer was announced last February and includes cash value and stock which totals in 2.9 billion dollars. Frontier´s stock has fallen since then. On the other hand, JetBlue’s announcement caused Spirit´s stock price to rise in the stock market.

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The union of both airlines makes sense from whichever way one sees it. As we reported a few days ago, Spirit just finished its move to the historical Marine Terminal of LaGuardia International Airport (LGA) in New York. This is incredibly important for this mergers since the only other tennant of the marine terminal is nonetheless JetBlue.

Having that operational duality from LaGuardia, both airlines find themselves in a de facto vantage point to attack one of JetBlue’s prime markets, the US east coast. Spirit is a Floridian airline and is also perfectly well placed to take advantage of the network that JetBlue built in New York and start flying mutually to underserved areas by the both of them.

It will be interesting to see what the management of Spirit Airlines decides regarding this incredible offer. Also we have to be on the lookout to see if Frontier fights back or if they roll over and go belly up. If we take into account the jolt that the stock of Spirit received after the news and how much more superior the offer of JetBlue is compared to Frontier’s, we can almost be sure that the New Yorker will very soon be the owner of the Floridian.