Spirit Airlines(US:SAVE)2022-05-16 02:20JetBlue's Offer Concerns - JetBlue's offer is deemed not superior due to regulatory concerns stemming from their Northeast Alliance (NEA), which is already facing a lawsuit [7] - The acquisition of Spirit by JetBlue is viewed as anticompetitive, eliminating a key competitor and vocal opponent of JetBlue's NEA deal [7] - JetBlue's claim of the "JetBlue Effect" is based on economic modeling that Spirit believes is flawed and overstates JetBlue's impact on legacy carriers [7] - JetBlue has not adequately protected Spirit's shareholders through their limited regulatory package and inadequate reverse termination fee, given the significant closing risks [7] Financial Analysis - JetBlue's 2019 passenger yield was 10.7¢, while Frontier's was 10.1¢ and Spirit's was 14.5¢ [14] - JetBlue's 2019 average fare was $182, while Frontier's was $53 and Spirit's was $55 [14] - JetBlue has experienced approximately $1.2 billion in value destruction since making its initial offer for Spirit [21] Frontier/Spirit Merger Advantages - The Spirit Board determined that JetBlue's original proposal represented an unsatisfactorily high degree of completion risk with inadequate protections for Spirit shareholders [9] - The planned Spirit/Frontier merger is considered the superior transaction for Spirit shareholders [7] - The Frontier/Spirit merger is expected to deliver $1 billion in annual consumer savings [32] - The combined Frontier and Spirit are projected to create 10,000 direct jobs by 2026 [32] - The Frontier/Spirit merger is expected to unlock $500 million in annual run-rate operating synergies [32]