Spirit Airlines stock tanks 20% as $JBLU terminates merger plan

Spirit Airlines Inc (NYSE: SAVE) tanked 20% in premarket on Monday after JetBlue Airways Corporation (NASDAQ: JBLU) terminated its $3.8 billion merger agreement with the ultra-low-cost carrier.

JetBlue-Spirit appeal did not bear fruit

The news arrives shortly after a federal judge blocked $JBLU from buying Spirit Airlines – citing the deal could increase fares for price-sensitive travellers.

JetBlue and $SAVE had together appealed that ruling in line with terms of the planned transaction. Joanna Geraghty – chief executive of JetBlue said today:

We were right to compete with Frontier and go for an opportunity that would have supercharged our growth and provided more opportunities for crewmembers.

Wall Street currently has a consensus “underweight” rating on Spirit Airlines stock that does not pay a dividend yield at writing either.

Spirit says it’s on course to achieve profitability

JetBlue terminated the agreement this morning as it saw “extremely low probability” of receiving regulatory approval for the planned merger.

Spirit Airlines stock is taking a hit today because coming together with $JBLU would have made it the 5^th largest carrier in the U.S.

But it’s important to note that $SAVE did express confidence last month that it’s on course to hit profitability again even without the JetBlue transaction.

Spirit Airlines forecasts its revenue to fall between $1.25 billion and $1.28 billion in the current quarter – ahead of estimates. The ultra-low-cost carrier ended 2023 with $1.3 billion in liquidity.

This is a developing story. Check back in a few minutes for more updates!

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