Spirit Airlines planes on the tarmac at the Fort Lauderdale-Hollywood International Airport on February 07, 2022 in Fort Lauderdale, Florida.
Joe Raedle | Getty Images
Shares of Spirit Airlines surged more than 22% on Tuesday after a report that JetBlue Airways has made a bid for the budget carrier, raising questions about Spirit’s deal to combine with rival discount carrier Frontier Airlines.
Spirit confirmed after the market closed on Tuesday that JetBlue had made an unsolicited offer.
JetBlue’s bid, reported earlier by The New York Times, comes less than two months after Spirit and Frontier agreed merge into a discount airline behemoth.
Spirit said its board was evaluating JetBlue’s proposal and will “pursue the course of action it determines to be in the best interests of Spirit and its stockholders.”
The competition for Spirit shows renewed appetite for consolidation in the airline industry as it digs its way out of two difficult pandemic years that hurt travel demand. Carriers are now scrambling to hire to meet a rebound in travel.
A wave of consolidation that began more than a decade ago left four major airlines in control of more than 70% of the U.S. market.
Trading in Spirit was halted before the market closed. Its shares were at $26.93. JetBlue offered $33 a share in its all-cash bid, according to Spirit.
JetBlue and Frontier didn’t immediately comment to CNBC.
JetBlue shares closed down about 7%.
Spirit and Frontier both solely fly planes in the Airbus A320 family. Those make up the majority of JetBlue’s fleet, which would reduce costs and logistical headaches in combining the carriers.
However, JetBlue has a partnership with American Airlines that allows the carriers to coordinate service in the Northeast U.S. The two airlines said the agreement would give them a better chance to compete against United and Delta Air Lines in crowded airports in New York and Boston.
The Justice Department sued to block that partnership last year.
American declined to comment on JetBlue’s offer for Spirit.