If JetBlue Airways successfully acquired Spirit Airlines, it would sell Frontier Airlines the company’s properties at New York’s LaGuardia Airport, the airline announced on Thursday.
The announcement appeared to convince regulators to accept JetBlue’s proposed $3.8 billion acquisition of Spirit.
The Justice Department and numerous states have filed lawsuits to stop the agreement, claiming that removing low-cost Spirit will lessen competition and raise prices.
JetBlue believes that because Frontier is the country’s second-largest low-cost carrier after Spirit, it is the best candidate to purchase the LaGuardia operation.
“We are committed to ensuring that our combination with Spirit preserves ultra-low-cost carrier access in New York,” JetBlue CEO Robin Hayes stated. “We are happy that this agreement with Frontier will maintain ultra-low-cost carrier service at LaGuardia Airport.”
The boards of both airlines approved a transaction when Denver-based Frontier attempted to acquire Spirit last year, but New York-based JetBlue outbid them.
Due to the congestion in the New York area, slots are limited at LaGuardia and John F. Kennedy International Airport, making them particularly valuable to airlines like Frontier that wish to expand in the New York area. Spirit’s holdings at LaGuardia include six gates at the Marine Air Terminal and the rights to 22 daily takeoff and landing times, or “slots.”
The partnership, according to Frontier CEO Barry Biffle, “will enable us to significantly expand our operations at LaGuardia” and reach more customers in the New York City region.
JetBlue’s decision to sell off some of Spirit’s assets comes two weeks after a federal judge and the government invalidated a JetBlue-American Airlines alliance on flights between New York and Boston because the agreement broke antitrust laws.
A different judge in Boston handles the government’s complaint against the JetBlue-Spirit sale, and a trial is slated for October.
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