JetBlue and Frontier Airlines recently announced a divestiture agreement due to JetBlue's merger with Spirit Airlines. Under this agreement, JetBlue has announced that it will divest all of its holdings of Spirit Airlines at New York City's LaGuardia Airport (LGA) to Frontier Airlines.

This specific divestiture was agreed upon as an upfront commitment during early talks of the merger agreement with Spirit. This divestiture agreement is also conditioned on the closing of the JetBlue and Spirit Airlines merger.

Transfer of spots at LaGuardia Airport

Frontier Airlines will take control of all of Spirit's holdings at LaGuardia Airport after the merger between JetBlue and Spirit is finalized. This includes the six gates that Spirit is currently in control of at the Marine Air Terminal. The holdings also include 22 takeoff and landing spots at the airport. The agreement for Frontier to take over the holdings is also conditioned upon approval by the Port Authority of New York and New Jersey, as well as the Federal Aviation Administration (FAA) and Department of Transportation (DOT).

The President and Chief Executive Officer of Frontier Airlines, Barry Biffle, was thrilled with the prospect of acquiring more critical space at the popular LaGuardia Airport. He stated,

"We’re pleased to have reached this agreement to acquire Spirit’s slot pairs and leasehold interests at New York’s LaGuardia Airport, pending regulatory approval of the JetBlue-Spirit merger. It will enable us to significantly expand our operations at LaGuardia and deliver even more ‘Low Fares Done Right’ to consumers in the greater New York City area."

In addition, both Spirit Airlines and JetBlue are acting upon conditions agreed upon during the early stages of merger talks. JetBlue firmly believes the merger will move towards closing and additionally expects that the transaction will close with Spirit Airlines in the first half of 2024. The Chief Executive Officer of JetBlue, Robin Hayes, spoke about Frontier Airlines keeping low-cost options in New York. He stated,

"We are committed to ensuring our combination with Spirit preserves ultra-low-cost carrier access in New York. We are pleased that this agreement with Frontier will maintain the same level of ultra-low-cost carrier service at LaGuardia Airport."

The Spirit and JetBlue merger slowly moves along

JetBlue and Spirit Airlines agreed to a $3.8 billion deal in the summer of 2022 in which JetBlue would acquire Spirit. The two airlines looked at merging together in order to create a fifth domestic airline in the United States. Currently, the Big Four domestic airlines, United Airlines, American Airlines, Delta Air Lines, and Southwest Airlines, make up nearly 80% of the market in the United States.

However, shortly after the deal was announced, the United States Department of Justice sued to block the acquisition. Their reasoning was to prevent industry consolidation and argued that the merger would eliminate competition in the ultra-low-cost market. The DOJ also said that the merger would be harmful to working-class Americans throughout the country. A date for the antitrust trial was set for October 16th, 2023.

In addition to the suit to block the Spirit and JetBlue merger, a judge in Boston recently ruled in favor of a 2021 lawsuit that would end the Northeast Alliance, which is a partnership between American Airlines and JetBlue. American Airlines announced that it would appeal the judge's ruling earlier this week.