JetBlue and Spirit aren’t giving up their fight to merge

A very big question that came to the fore after a federal judge blocked a merger of JetBlue Airways and Spirit Airlines this past week was if Spirit could survive. 

After U.S. District Judge William Young’s decision on Tuesday, veteran airline analyst Helane Becker of TD Cowen had suggested Spirit might be headed into the dustbin of failed airlines, which include Pan American, Trump Air, and others. 

That is, to bankruptcy protection or, worse, liquidation.

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Spirit was urging JetBlue to appeal the decision all week. 

Friday afternoon, the two carriers announced they were appealing Young’s decision that agreed with the Justice Department’s contention the $3.8-billion deal was anticompetitive. 

The appeal will go to the U.S. First Circuit Court of Appeals, headquartered in Boston. 

Spirit shares get a boost

The news prompted a 17.2% gain in Spirit  (SAVE) – Get Free Report shares to $6.68 in regular trading and an additional 9.2% to $7.28 after hours. 

That hardly means Spirit is out of trouble. The shares, based on Friday’s close, are still down 59% since the end of 2023. The stock was as high as $84 in late 2014. 

JetBlue  (JBLU) – Get Free Report, meanwhile, was off 1.2% to $4.99 on Friday and is down 9.3% from Dec. 29. 

JetBlue and Spirit Airlines are appealing a ruling halting their merger.

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The carriers are trying to merge to build more muscle to be able to compete against the domestic giants including American Airlines  (AAL) – Get Free Report, United Airlines  (UAL) – Get Free Report, Delta Air Lines  (DAL) – Get Free Report, Alaska Airlines  (ALK) – Get Free Report and Southwest Airlines  (LUV) – Get Free Report.

The pandemic effect 

JetBlue and Spirit have struggled, as have all airlines after Covid-19 briefly gutted travel demand plus soaring fuel costs in the post-Pandemic era.

You can see the struggle in the five-year performance of the U.S. Global Jets exchange-traded fund  (JETS) – Get Free Report. The group includes airlines and related businesses around the world.

The ETF is off 4.8% this year.  JetBlue represents 3% of its holdings. The ETF doesn’t own Spirit. The ETF’s biggest holding is Southwest.  

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