Spirit Airlines nyse Save Shares Surge As Jetblue and Spirit Challenge Merger Block

Spirit Airlines (NYSE: SAVE) Shares Surge as JetBlue and Spirit Challenge Merger Block

JetBlue Airways Corporation (NASDAQ: JBLU) and Spirit Airlines (NYSE: SAVE) have officially appealed a recent federal court ruling that halted their planned merger, citing antitrust concerns.

The appeal, a concise two-page document submitted after the market closed on Friday, did not delve into legal arguments but informed the court of the airlines’ determination to proceed with their merger plans. If successful, the merger would result in the creation of the nation’s new fifth-largest airline.

Earlier in the week, the court’s decision to block the merger was met with disagreement from the airlines.

In a joint statement issued on Tuesday, they stated,

“We continue to believe that our combination is the best opportunity to increase much-needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers.”

Spirit shares have plummeted by over 50% since the initial court ruling halting the deal on Monday. However, on news of the appeal, SAVE stock surged by 10% in after-hours trading. Simultaneously, JBLU stock experienced a 3% decline.

Spirit Airlines (NYSE: SAVE) witnessed a 17% increase in regular-hours trading on Friday after reassuring investors that the blocked merger with JetBlue would not jeopardize its business.

Yet, the outlook for Spirit remains uncertain. Analysts anticipate ongoing financial losses, with the looming possibility of bankruptcy. Nevertheless, there is optimism among some experts who envision the potential for another airline to acquire the struggling carrier.

JPMorgan analysts suggest JetBlue Airways (NASDAQ: JBLU) could opt out of the original deal due to its high cost and potential legal hurdles. However, there remains a possibility of JetBlue expressing interest in specific assets of Spirit, such as aircraft and pilots, albeit under revised terms.

The outcome of the appeal hangs in uncertainty. While JetBlue may be obligated to pursue it legally, analysts express skepticism about its ability to alter the final decision. The future of both airlines is in limbo, and the potential consequences could reverberate throughout the industry.