JetBlue Airways has struck a deal to buy Spirit Airlines in a transaction valued at $3.8 billion, laying the foundation for the creation of a low-fare challenger to the dominant Big Four U.S. airlines.
Under the deal, which is subject to approval by regulators and Spirit shareholders, JetBlue will buy Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share that’s payable once Spirit stockholders approve the transaction.
The companies said they expect the regulatory process to conclude and the transaction to close in the first half of 2024 at the latest. The airlines will carry on independently until then, and there will be no changes to their respective loyalty programs or customer accounts.
Shares of Spirit rose 4.7 percent in midafternoon trading to $25.45, while JetBlue fell 2.4 percent to $8.22.
In addition to the prepayment, JetBlue will also pay a “ticking fee” of $0.10 per month starting in January 2023 through closing, for an aggregate fully diluted equity value of $3.8 billion and an adjusted enterprise value of $7.6 billion, the companies said.

“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” JetBlue CEO Robin Hayes said in a statement.
“Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines.”
The merger will establish the fifth-biggest airline in the United States.