JetBlue and Spirit Airlines terminate $3.8 billion merger agreement

JetBlue Airways and Spirit Airlines on Monday said they were terminating their merger agreement weeks after losing a federal antitrust lawsuit that challenged the deal.

A federal judge blocked the attempted merger in January after the Justice Department sued to bar the deal last year alleging the acquisition would stifle competition in the airline industry and eliminate Spirit as a discount alternative for price-conscious travelers.

JetBlue and Spirit appealed the judge’s decision a couple of days later, but JetBlue noted the appeal was required under the terms of the merger agreement.

Spirit shares tumbled 17% in premarket trading, while shares of JetBlue were up roughly 4%.

“It was a bold and courageous plan intended to shake up the industry status quo, and we were right to compete with Frontier and go for an opportunity that would have supercharged our growth and provided more opportunities for crewmembers,” JetBlue CEO Joanna Geraghty said in a note to staff on Monday.

“However, with the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low.”

This is a developing story. Please check back for updates.