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.
More on airlines
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
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 and Spirit Airlines are appealing a ruling halting their merger.
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.
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.