JetBlue is headquartered in Long Island City (Photo: Creative Commons)
July 29, 2022 By Michael Dorgan
New York’s hometown airline is about to get a whole lot bigger.
JetBlue, which is headquartered in Long Island City, agreed Thursday to buy the low-cost carrier Spirit Airlines for $3.8 billion.
The takeover deal, if approved by regulators, would create the nation’s fifth-largest airline behind American Airlines, Delta, Southwest and United – which are often referred to as the “Big Four.”
It is unclear whether the massive merger would add jobs at JetBlue’s headquarters at 27-01 Queens Plaza North — where more than 1,000 employees are based — although it is highly likely, since the combined company will be based out of New York when the deal is completed.
The merger comes about a year after there were fears that JetBlue would move its corporate headquarters from Long Island City to Florida—as its lease at 27-01 Queens Plaza North was scheduled to end July 2023.
However, the company announced in August that it would retain its Long Island City headquarters in the long term, after much lobbying by the likes of U.S. Senator Charles Schumer.
JetBlue and Spirit, which is headquartered in Florida, issued a joint statement yesterday that the combined airline would have 458 planes with more than 1,700 daily flights to more than 125 destinations in 30 countries. Following the completion of the acquisition, they said the combined airline would be based in New York.
The combined company would aim to put pressure on the big airlines in terms of pricing.
“Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines,” said Robin Hayes, the CEO at JetBlue.
“This combination is an exciting opportunity to diversify and expand our network, add jobs and new possibilities for Crewmembers, and expand our platform for profitable growth.”
Hayes said that JetBlue, with Spirit, would have a 9 percent market share, compared to the Big Four which collectively controls more than 80 percent of the industry.
The agreement comes a day after Spirit announced it had backed out of a separate deal to merge with rival discount carrier Frontier Airlines. The two airlines had been locked in negotiations since February, but Spirit’s board of directors could not convince its shareholders to agree to a deal, according to published reports.
Instead, Spirit’s board has now agreed on a JetBlue cash offer.
However, the deal will have to get the backing of antitrust regulators before the merger can be finalized.
JetBlue and Spirit said the airlines expect to win regulatory approval in the fourth quarter of 2023 or the first quarter of 2024. The carriers expect the deal to close in the first half of 2024.
The combined company is projected to generate annual revenues of around $11.9 billion.
