US-based carriers Spirit Airlines and JetBlue have agreed to terminate their planned merger because of ¡°current regulatory obstacles¡±.

The move comes after JetBlue¡¯s deal to buy Spirit in a deal worth $3.8 billion, which was first announced in July 2022, was blocked by a US judge in January on competition grounds following an antitrust lawsuit filed by the US Department of Justice (DOJ).

Spirit and JetBlue initially filed a notice of appeal against the judge¡¯s decision but now both airlines have mutually agreed to terminate their agreement.

Ted Christie, Spirit's president and CEO, said: ¡°After discussing our options with our advisors and JetBlue, we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement.

¡°We are disappointed we cannot move forward with a deal that would save hundreds of millions for consumers and create a real challenger to the dominant ¡®Big 4¡¯ US airlines. However, we remain confident in our future as a successful independent airline.¡±??

The deal between the two airlines required the merger to be finalised by 24 July 2024. JetBlue said gaining legal and regulatory approval by this date was ¡°unlikely¡±.

Joanna Geraghty, JetBlue¡¯s CEO, added: ¡°We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines.?

¡°We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines¡¯ interests are better served by moving forward independently.¡±

Under the agreement, JetBlue will pay Spirit $69 million and the termination of the deal ¡°resolves all outstanding matters¡±.

JetBlue added that it would now focus on its ¡°organic strategy and return to profitability¡±.