JetBlue Airways has reached a $3.8 billion deal to buy Spirit Airlines and create the country's fifth-largest airline.
What does that mean for passengers, loyalty program members and co-brand credit card holders? Here's what you need to know.
News of the deal came a day after Spirit scrapped plans to combine with Frontier Airlines due to lack of shareholder support, according to CNBC.
Under the agreement, JetBlue will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit stockholders' approval of the transaction and a ticking fee of 10 cents per month starting in January 2023 through closing.
JetBlue CEO Robin Hayes said the merger provides a unique solution to the lack of competition in the U.S. airline industry.
"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," 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."
Ted Christie, president and chief executive officer of Spirit, called the move a "gamechanger."
"We are thrilled to unite with JetBlue through our improved agreement to create the most compelling national low-fare challenger to the dominant U.S. carriers, and we look forward to working with JetBlue to complete the transaction," Christie said in a statement.
The combined company is projected to have annual revenues of approximately $11.9 billion based on 2019 revenues, according to JetBlue.
The completion of the acquisition is subject to customary closing conditions, including receipt of required regulatory approvals and approval of Spirit's stockholders. The companies expect to conclude the regulatory process and close the deal no later than the first half of 2024. After closing, the combined airline will be based in New York and led by Hayes, JetBlue's current CEO.
What should passengers expect in the meantime?
For now, nothing changes. The airlines will continue to operate independently until after the transaction closes. Their respective loyalty programs will remain unchanged and customer accounts will not be affected in any way. All tickets and points remain valid, and you can continue to book as you always have.
Once the deal is complete, JetBlue says customers will benefit from access to more routes, greater connectivity and better onboard experiences.
After closing, loyalty programs will be merged and Free Spirit members will be welcomed to TrueBlue. Loyalty points accrued with Spirit will be transferred and honored.
If you have either of the airlines' co-brand credit cards, nothing changes in the short-term. Cardholders can continue to accrue and use points as usual. After closing, Free Spirit cardholders will be welcomed to the JetBlue card, and all accrued points will be transferred and honored.