Category Archives: Spirit Airlines

JetBlue issues letter to Spirit shareholders, voting starts tomorrow

JetBlue Airways today issued an open letter to shareholders of Spirit Airlines:

The full letter follows:

Dear Spirit Shareholders,

Tomorrow, Spirit shareholders have YOUR chance to help assure you receive the most value for your Spirit shares by voting AGAINST the Frontier transaction.

If you want more value and more certainty, sooner, your choice is clear. By voting AGAINST the Frontier transaction you vote FOR:

A superior all-cash price of at least $33.50 per Spirit share, a premium of 51% to the implied value of the Frontier transaction as of June 28, 2022;

An accelerated payment of $2.50 per Spirit share – or 13% more than Frontier’s prepayment;

Greater regulatory commitments, including a larger reverse break-up fee of $400 million and a more significant divestiture commitment than Frontier, despite similar regulatory profiles; and

A ticking fee – a monthly prepayment of $0.10 per share from January 2023 until the deal is consummated or terminated.

In fact, Spirit shareholders would receive more cash in the unlikely event a JetBlue deal is terminated ($4.30 per share assuming the ticking fee is paid in full) than they would receive if the Frontier transaction is consummated ($4.13 per share).

Ultimately, however you assess the probability of regulatory approval of each transaction, you are always better off with the JetBlue transaction.

As one of Spirit’s top ten shareholders said, “We firmly believe that if, as shareholders, we must wait for a transaction to be consummated following a lengthy regulatory process, we are much better off waiting alongside JetBlue, which is willing to compensate us along the way. The Board’s self-serving actions and failure to accept JetBlue’s $33.50 per share offer is preventing shareholders from receiving superior value.”

Only by voting AGAINST the Frontier transaction can you assure that you will receive the benefits of our offer.

The entrenched Spirit Board needs to know that you, their shareholders, want our better offer.

Multiple Spirit directors have significant ties to Frontier’s controlling shareholder, Bill Franke,resulting in a conflicted Spirit Board more focused on securing an inferior transaction with Frontier than maximizing value for its own shareholders.

While negotiating for eight months with Frontier, Spirit’s Board never seriously considered any alternatives, resulting in an original merger agreement with Frontier that was clearly suboptimal, with a low premium, no reverse break-up fee, and no divestiture commitment. Frontier has improved its offer twice only because we launched our “vote no” campaign.

The Spirit Board consistently ignored or refused to engage with JetBlue until faced with certain defeat on the original shareholder meeting date and then, in an attempt to avoid the widespread perception of its poor corporate governance, pretended to engage with JetBlue.

The Spirit Board continues to forgo any engagement or good faith negotiation with JetBlue, publicly rejecting our latest proposal in less than a day without ever discussing the amended terms.

Don’t let the Spirit Board’s allegiances to Frontier’s controlling shareholder keep you from the most value creating opportunity. This is the time to make your voice heard and deliver a clear message to the entrenched Spirit Board that you want the superior JetBlue transaction.

Vote AGAINST the Frontier transaction today.

Sincerely,

Robin Hayes
Chief Executive Officer

JetBlue further enhances its offer for Spirit Airlines

JetBlue Airways has announced that it is modifying its proposal to acquire Spirit Airlines based on discussions with Spirit shareholders, and issued an open letter detailing the benefits of its decisively superior proposal and the recent misleading statements made by Spirit. JetBlue is communicating the modified proposal to Spirit’s Board.

JetBlue continues to encourage Spirit shareholders to vote AGAINST Frontier’s inferior offer. After engagement and consultation with shareholders and positive investor reaction to the value and certainty of JetBlue’s offer, JetBlue today amended its already superior proposal:

Increased accelerated prepayment to $2.50 per share, structured as a cash dividend to Spirit shareholders promptly following the Spirit shareholder vote approving the combination between Spirit and JetBlue (subject to CARES Act limitations).

Enhanced reverse break-up feeof $400 million payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons.

Addition of a ticking fee mechanism, which would provide shareholders with a monthly prepayment of $0.10per share between January 2023 and the consummation or termination of the transaction. This represents an estimated aggregate ticking fee of up to $1.80 per share, of which the first $1.15 per share in payments will offset the reverse break-up fee or the merger consideration. Any payments in excess of the $1.15 per share will be incremental to the total purchase price of $33.50 or the reverse break-up fee. This increases the total transaction consideration to up to $34.15 per share in the event the transaction is consummated and total downside protection to $4.30 per share, or approximately $470 million in the aggregate, in the event the transaction is terminated.

“After the Spirit Board’s failure to recognize our decisively superior offer, we’ve discussed our offer directly with Spirit shareholders and are now modifying our proposal in response to shareholders’ expressed interest, to include a monthly payment for shareholders, with the certainty of a significant cash premium at closing,” said Robin Hayes, chief executive officer, JetBlue. “Spirit shareholders should not be misled by Spirit and Frontier’s rosy projections of a potential future stock price, which are based on highly flawed assumptions that fail to account for the actual market conditions, including the need for pilot pay increases and elevated fuel costs. The entrenched Spirit Board has approved a revised deal that is ultimately better for Frontier and its controlling shareholder than it is for Spirit shareholders.”

The full letter follows:

Dear Spirit Shareholders,

After the conflicted Spirit Board failed to recognize our decisively superior proposal, we have continued to engage with shareholders who are supportive of our superior proposal and we are now modifying our already superior proposal with the following:

Increased accelerated prepayment to $2.50 per share, structured as a cash dividend to Spirit shareholders promptly following the Spirit shareholder vote approving the combination between Spirit and JetBlue (subject to CARES Act limitations).

Enhanced reverse break-up feeof $400 million payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons.

Addition of a ticking fee mechanism, which would provide shareholders with a monthly prepayment of $0.10per share between January 2023 and the consummation or termination of the transaction. This represents an estimated aggregate ticking fee of up to $1.80 per share, of which the first $1.15 per share in payments will offset the reverse break-up fee or the merger consideration. Any payments in excess of the $1.15 per share will be incremental to the total purchase price of $33.50 or the reverse break-up fee. This increases the total transaction consideration to up to $34.15 per share in the event the transaction is consummated and total downside protection to $4.30 per share, or approximately $470 million in the aggregate, in the event the transaction is terminated.

The facts demonstrate that our offer to acquire Spirit remains decisively superior to the recently amended Frontier transaction. Yet, the entrenched Spirit Board is clinging to the inferior Frontier transaction with pie-in-the-sky promises and an overly simplistic regulatory argument. Their pitch to shareholders simply doesn’t add up.

JetBlue offers more value and certainty to Spirit shareholders, while the Spirit Board continues to mislead its own shareholders:

Superior all-cash price of at least $33.50per Spirit share representing a substantial premium of 52.1% above the implied value of the amended Frontier transaction and guaranteeing certain value.

Offers Spirit shareholders more value under any scenario and better trading value in the short term. As we predicted in our release on Friday night, the dilution from incremental leverage embedded in the Frontier amended merger agreement put pressure on the Spirit stock. On the other hand, the rejection of the Frontier transaction will result in a higher price for Spirit stock, even before any consideration of the likelihood of JetBlue’s transaction closing.

Spirit’s Board has made a lot of lofty promises to secure “yes” votes from investors, but here’s what the Spirit Board and Frontier management do NOT tell you:

Shareholders should not be fooled by Spirit’s and Frontier’s rosy projections of $50 per share. Spirit shareholders are being promised an unrealistic future value based on financial projections that are a house of cards given the realities of the market. Among other things, they want you to believe in assumptions that fail to account for the actual market conditions they would face, including the need for pilot pay increases and elevated fuel costs. In a recent message, the Spirit’s pilot union, ALPA, said it was “deeply troubled” that Spirit had not planned a single dollar for increased pilot wages for the next five years, even as Spirit’s pilot attrition has skyrocketed.When using realistic adjustments and accounting for time value of money, the present value of Spirit’s future share price is between $20-30; a clear discount to the $33.50 in cash offered by JetBlue.

Since our updated proposal on June 6 through June 24, the Spirit stock price increased by 18%; on June 27, the first day of trading since the announcement of the amended Frontier merger agreement, the Spirit stock declined by 8%.

Spirit shareholders are effectively paying for half of the recent improvement in the terms of the Frontier transaction. While the Spirit Board presents Frontier’s revised transaction as a $2 per share improvement in headline price, in reality, it is only about $1 of incremental economic value. Spirit shareholders will own approximately 50% of the combined company and, as a result, are effectively funding half of this improvement in cash consideration as it is being financed through debt taken on by the combined company. As a result, the implied market value of the Frontier transaction is now ($22.03) LOWER than it was on Friday ($22.29), before their supposed improvement. Frontier is taking this value out of your pocket to fund part of their payment to you.

Frontier and Spirit would have you believe their transaction will sail through antitrust approval, but that confidence is either naive or disingenuous. Outside experts agree that, within the current administration, our transaction has a similar chance as Frontier in gaining approval. Frontier and Spirit themselves have even acknowledged the significant antitrust risk inherent in their combination – both by adding a reverse break-up fee and walking back their optimistic timeline.

It is clear the market agrees – the JetBlue offer is good for Spirit shareholders. Since our initial proposal was made public on April 5, Spirit’s share price performance has reflected its shareholders’ overwhelmingly positive view of our offer, and their confidence in our ability to achieve regulatory clearance of the transaction.

The entrenched Spirit Board is now claiming they have served their shareholders by approving an amended Frontier transaction. Yet in fact, they have never negotiated with us and have now favored a transaction that better serves Frontier’s controlling shareholder than Spirit’s shareholders. In exchange for the minimal financial concessions the Spirit Board was able to get from Frontier – which, after even cursory examination, don’t add value or support their projected future value – they chose to weaken Spirit shareholders’ governance in the combined company through less board representation.

Spirit’s entrenched Board continues to stand in the way of the most value creating opportunity available to Spirit shareholders. Time is running out for Spirit shareholders to maximize their investment. The facts are clear. Our proposal is superior. Vote AGAINST the Frontier transaction at Spirit’s special meeting on June 30.

Sincerely,

Robin Hayes
Chief Executive Officer

The airline continued;

JetBlue today welcomed the recent public support in favor of its clearly superior offer to acquire Spirit).

Institutional Shareholder Services (“ISS”), a leading independent proxy advisory firm, issued late yesterday an updated report now acknowledging that clients may find the modified JetBlue proposal “preferable” to the Frontier offer for Spirit and may therefore choose to vote AGAINST the inferior Frontier transaction at Spirit’s upcoming special meeting, despite ISS’s inability to change its official recommendation.
Further, major Spirit shareholder TIG Advisors publicly declared that it will vote AGAINST the Frontier merger at the Spirit special meeting, and sent a letter to the Spirit Board in which it said, “We believe JetBlue’s acquisition proposal is the far superior outcome for Spirit and its shareholders, given its all-cash bid eliminates execution risk and maximizes certainty of value.”

In its new report, ISS, citing the recent changes to JetBlue’s offer, noted that “the enhancements by JetBlue may be enough to offset the potential upside of the proposed merger with Frontier (particularly when the market reaction to last week’s developments is considered – Spirit share price decreased 8.0 percent on June 27, 2022, the first trading day after announcement of the revised Frontier offer terms).”

ISS further noted that “the gap between the headline offers has not only widened since Spirit and Frontier modified the deal terms late last week, but the prepayment dividend and the reverse termination fee accompanying the JetBlue offer are now more favorable for Spirit shareholders than the corresponding provisions accompanying the Frontier offer. At the same time, the addition of the ticking fee in the JetBlue offer – a provision without a counterpart in the Frontier offer – provides a further level of regulatory risk mitigation.”

By entering into a revised merger agreement with Frontier less than a week before the special shareholder meeting, the Spirit Board has given ISS, and all shareholders, little time to weigh the improved proposals.

“Our decisively superior offer is being recognized by Spirit shareholders and proxy advisors as providing more for Spirit shareholders than the ill-fated Frontier merger, which the conflicted Spirit Board has entered into,” said Robin Hayes, chief executive officer, JetBlue. “While we understand and respect ISS’s reticence to change their official recommendation so close to the special shareholder meeting, we note that they have specifically instructed clients how to change their votes to vote AGAINST the inferior Spirit transaction. We intend to continue to actively solicit votes to defeat the Frontier proposal and to take every possible step available to us to assure that Spirit’s shareholders have the opportunity to choose the superior value we are offering. The negative market reaction to Spirit’s revised merger agreement is consistent with what we are hearing from shareholders in addition to TIG Advisors. Shareholders can send a clear message to the Spirit Board by voting ‘No’ at the upcoming Spirit special meeting.”

JetBlue aircraft photo gallery:

JetBlue comments on the Frontier-Spirit announcement

JetBlue Airways has issued the following statement regarding the revised Frontier-Spirit merger agreement:

We continue to believe JetBlue’s proposal is decisively superior to the Frontier transaction, even considering its revised terms, and it continues to offer Spirit shareholders significantly more value, more cash, more certainty, and more regulatory protections.

JetBlue offers $33.50 per Spirit share in cash, a very significant 38%¹ premium to the implied market value of the amended Frontier transaction. Also, importantly the incremental $2.00 per Spirit share offered by Frontier are effectively being paid by Spirit shareholders through their ownership in the combined company, therefore resulting in only approximately $1 of incremental economic value.

We will more thoroughly review and assess the revised terms of the Frontier-Spirit merger agreement, and we intend to continue our “vote no” campaign against the inferior Frontier transaction at the special meeting.

Since our initial proposal was made public on April 5, Spirit’s share price performance has reflected its shareholders’ overwhelmingly positive view of our offer, and their confidence in our ability to achieve regulatory clearance of the transaction, an outcome which remains supported by outside regulatory experts’ analysis.

The conflicted Spirit Board continues to rely on a series of mischaracterizations to justify an inferior deal – about the regulatory situation, that is at odds with the views of outside experts that our transaction can get done; about the Northeast Alliance, despite the overwhelming facts supporting its pro-competitive nature; and about the impact of the changing industry environment, including competition for pilots. Adding to these misrepresentations, the Spirit Board is now claiming they have served their shareholders by accepting a revised Frontier proposal, an act which does not change the fundamental superiority of our transaction, agreeing, among other things, in exchange for underwhelming financial concessions, to weaken Spirit shareholders’ governance in the combined company through less board representation.

Top Copyright Photo: JetBlue Airways Airbus A320-232 N636JB (msn 2755) (Spotlight) LAX (Michael B. Ing). Image: 957969.

JetBlue aircraft photo gallery:

JetBlue aircraft slide show:

Spirit Airlines receives an improved offer from Frontier Airlines, board still prefers Frontier’s offer

The bidding war for Spirit Airlines continues between Frontier Airlines and JetBlue Airways.

On Friday, Frontier increased its bid by bumping up its cash component of the deal by $2 per share to $4.13 per share. This also includes 1.9126 Frontier shares for the cash-and-stock offer.

Frontier will also prepay $2.22 per share as a cash dividend to all Spirit stockholders subject to the approval of the buy-out.

Frontier has also increased its termination fee to Spirit Airlines to $350 million.

Frontier also urged all Spirit stockholders to approve the Frontier offer.

Spirit shareholders will vote on the two offers on June 30.

As a result, Spirit Airlines made this announcement:

Spirit Airlines, Inc. has announced the signing of a second amendment (the “Amended Agreement”) to its previously announced merger agreement with Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc., dated February 5, 2022.

Based on the improved terms offered by Frontier, the Spirit Airlines Board of Directors reiterates its unanimous recommendation that Spirit stockholders vote FOR the merger agreement with Frontier. As part of its determination to recommend the Frontier merger agreement, Spirit’s Board of Directors carefully reviewed the terms of JetBlue’s revised proposal received on June 20, 2022 and instructed Spirit’s management and advisers to engage in extensive discussions with JetBlue, including negotiating further the terms of JetBlue’s draft merger agreement and providing extensive additional due diligence to JetBlue and its advisors. After considering this review and discussions, Spirit’s Board of Directors determined JetBlue’s revised offer is not a Superior Proposal.

Under the terms of the Amended Agreement, which has been approved by the Boards of Directors of both companies:

Frontier will increase the per-share cash consideration payable to Spirit stockholders to $4.13 in cash, in addition to the per-share stock consideration of 1.9126 shares of Frontier that Frontier previously agreed to pay Spirit stockholders. Frontier has also agreed that $2.22 per share will be prepaid to Spirit stockholders on a record date to be determined as a cash dividend following approval of the transaction by Spirit stockholders and consistent with all applicable laws, including restrictions under the CARES Act. The $2.22 per share dividend will be funded by Frontier.
Frontier will increase its reverse termination fee to $350 million to Spirit in the unlikely event the combination is not consummated for antitrust reasons.
The number of directors of the combined company to be named by Frontier will increase by one and the number of directors of the combined company to be named by Spirit will decrease by one.

The Board believes a merger with Frontier is the most financially and strategically compelling path forward for Spirit stockholders and has a greater likelihood of closing.

With both cash and stock consideration, the Frontier merger offers Spirit stockholders compelling value now, plus the economic upside of continued ownership at a time when the airline industry outlook is only getting brighter.
- Today, airline sector stock prices are approaching the lows seen during the depths of the pandemic in 2020. Within a year of those lows, Spirit was trading above $39 per share, having more than quadrupled in price.
- The outlook for the sector is bright, with TSA check-point traveler numbers equaling or exceeding 2019 levels in recent months and with airline unit revenues reaching their highest levels in ten years.
- The Spirit Board is focused on maximizing value for Spirit stockholders by agreeing to a transaction that provides a combination of near-term cash and exposure to the airline sector recovery.
Under the revised terms of the Frontier merger agreement, the pro forma value to Spirit stockholders by 2024 could exceed $50 per share, driven by the equity upside from the realization of synergies, airline sector recovery, and the ongoing growth of both airlines. Based on work done by Spirit advisors, this assumes:
- Wall Street analyst earnings forecasts for 2024E;
- Realization of $500 million in annual net operating synergies; and
- The pro forma company trades at a price-to-earnings multiple of 11x, based on Spirit’s 2017-2019 pre-pandemic average.
In addition to the substantial future value creation available, Spirit stockholders will receive the benefit of a near-term cash dividend following approval of the transaction at the Special Meeting on June 30, 2022.

Ted Christie, President and CEO of Spirit, said, “We are thrilled to announce the terms of Spirit’s amended agreement with Frontier, which includes nearly double the per-share cash consideration of our prior agreement with Frontier while still allowing stockholders to benefit from the economic upside of airline industry recovery. As this recovery progresses and demand returns, the price of the combined airline’s stock is expected to exceed the per-share price of JetBlue’s fixed, all-cash offer. We urge stockholders to vote FOR the merger agreement with Frontier on the WHITE proxy card prior to the June 30 Special Meeting.”

Spirit Board Conducts Thorough Process and Determines JetBlue’s Offer is NOT a Superior Proposal

The Spirit Board of Directors conducted a thorough process when considering competing proposals from JetBlue and Frontier. JetBlue and Frontier had access to the same due diligence information, on the same terms. Spirit’s process included extensive discussions with Frontier and JetBlue regarding financial terms, regulatory risks and integration processes. Spirit ultimately received revised proposals from both parties this week. Following the conclusion of this process, the Spirit Board determined that the revised offer Spirit received from JetBlue on June 20, 2022 is not a Superior Proposal and continues to recommend Spirit stockholders adopt the merger agreement with Frontier.

A JetBlue transaction faces significantly greater regulatory impediments than a Frontier transaction.

Although Spirit has continued to engage with JetBlue and its advisors regarding regulatory matters and strategy, Spirit does not believe that a JetBlue transaction will overcome regulatory objections.
Spirit has long taken the position that excessive consolidation in the airline industry over the last two decades has resulted in the three legacy airlines dominating domestic air travel. Merging Spirit into JetBlue and its Northeast Alliance (“NEA”) with American Airlines will exacerbate regulators’ valid concerns over airline industry concentration. The proposed Spirit/Frontier combination will, by contrast, create a stronger, more relevant, and more effective nationwide ULCC challenger to the dominant carriers.
JetBlue has made it clear that it is committed to the NEA, which Spirit believes is an anticompetitive and unlawful de facto merger between American and JetBlue that aligns JetBlue’s interests broadly with a legacy carrier. Spirit believes the existence of the NEA makes it even more unlikely that JetBlue’s acquisition of Spirit will be approved. Indeed, the DOJ has sued to block the NEA between JetBlue and American Airlines on grounds that the NEA is anticompetitive, which further increases the regulatory risk of JetBlue’s offer to acquire Spirit and the likelihood that the DOJ will be able to block a JetBlue/Spirit combination.
Although JetBlue’s revised offer purports to provide improved regulatory commitments, JetBlue has insisted on maintaining a significant carve-out allowing JetBlue to refuse to take actions needed to gain regulatory approval if – in JetBlue’s sole and absolute discretion – any such actions would materially and adversely affect JetBlue’s anticipated benefits under its NEA venture with American. This broad carve-out creates an unacceptable risk for Spirit stockholders and only confirms that JetBlue will prioritize the NEA over the completion of a transaction with Spirit.
The proposed merger of Spirit and Frontier would create a better and more disruptive nationwide ULCC competitor to the Big Four carriers, further democratizing air travel and bringing more ultra-low fares to more destinations. By contrast, a JetBlue/Spirit combination will result in a higher-cost and higher-fare airline that would eliminate a lower-cost and lower-fare airline and remove about half of the ULCC capacity in the United States, resulting in higher fares for consumers.

“The Spirit Board of Directors conducted a thoughtful and thorough process when considering the competing proposals, and after extensive discussions with Frontier and JetBlue, we firmly believe that a combination with Frontier continues to be in the best interests of the Company and our stockholders, especially given the increased per-share consideration and enhanced reverse termination fee,” said Mac Gardner, Chairman of the Board of Spirit. “A merger with Frontier poses less regulatory risk on Spirit stockholders and increases competition in the industry for the benefit of consumers. The Board is confident a merger with Frontier is the most financially and strategically compelling path forward for Spirit stockholders, with more certainty and the strongest likelihood of closing.”

Video:

Your Vote Is Important

Spirit has scheduled the Special Meeting of Stockholders (the “Special Meeting”) to approve the proposed merger with Frontier for Thursday, June 30, 2022 at 9:00 a.m., Eastern Time. All stockholders of record as of the close of business on May 6, 2022 are entitled to vote at the Special Meeting.

The Spirit Board of Directors strongly recommends you vote FOR the merger agreement on the WHITE proxy card. As a reminder, a vote against Frontier is not a vote for JetBlue, nor will it necessarily lead to a transaction with JetBlue. It is simply a vote against entering into a highly accretive transaction that is less challenging to complete from a regulatory perspective. To ensure your vote is counted, vote on the WHITE proxy card today.

Top Copyright Photo: Spirit Airlines Airbus A320-271N WL N943NK (msn 10563) IAH (Jarrod Wilkening). Image: 957968.

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JetBlue further improves proposal to acquire Spirit

JetBlue Airways has announced that it has submitted a decisively superior proposal to the Board of Directors of Spirit Airlines to acquire all of the outstanding common stock of Spirit.

The further improved proposal, which was submitted at the request of Spirit’s Board and following completion of JetBlue’s diligence review and discussions with Spirit’s management team, is an update to JetBlue’s previous proposals (dated March 29, 2022, April 29, 2022, and June 6, 2022, respectively) and is structured to maximize value and certainty for Spirit and its stockholders, with terms including:

Increased price of $33.50 per Spirit share: JetBlue’s proposal continues to offer Spirit stockholders a superior, all-cash premium. The increased price of $33.50 per Spirit share represents an improvement of $2.00per share or 6.3% compared to JetBlue’s June 6 proposal, and a 67.6%¹ premium to the implied value of the Frontier transaction as of June 17, 2022.

Stronger divestiture commitment: JetBlue’s June 20 proposal includes a significant enhancement to its prior proposals through an obligation to divest assets of JetBlue and Spirit up to a material adverse effect on the combined JetBlue-Spirit, with a limited carve-out to this divestiture obligation for actions that would be reasonably likely to materially and adversely affect the anticipated benefits under JetBlue’s Northeast Alliance. This commitment significantly increases the divestitures JetBlue would be willing to commit to making in order to obtain regulatory approval and meaningfully exceeds the divestiture commitment from Frontier.

In addition to the improved terms, the proposal continues to include commitments from previous proposals that were well received by Spirit stockholders:

Reverse break-up fee: JetBlue would continue to offer a reverse break-up fee of $350 million, or $3.20 per Spirit share², payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons. This represents an increase of $100 million, or $0.91 per Spirit share, compared to the reverse break-up fee Frontier agreed to on June 2.

Accelerated prepayment of $1.50 per share: JetBlue would prepay $1.50 per share in cash to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue. As a result, Spirit stockholders would receive total aggregate consideration of $33.50 per share in cash, comprised of $32.00 per share in cash at the closing of the transaction and the prepayment of $1.50per share in cash.

Divesture commitment in New York and Boston: JetBlue’s proposal continues to include a proactive offer to the U.S. Department of Justice of a remedy package that contemplates the divestiture of all Spirit assets located in New York and Boston so, as a result of the transaction, JetBlue will not increase its presence in the airports covered by the Northeast Alliance, as well as gates and related assets at Fort Lauderdale.

“After discussions with the Spirit team last week and further due diligence review, we are more convinced than ever that a JetBlue-Spirit transaction would create a true national competitor to the Big Four and deliver value to all of our stakeholders,” said Robin Hayes, chief executive officer, JetBlue. “Together, we will deliver lower fares and a better experience to more customers.

“Our previous proposal was met with an extremely positive reaction from Spirit stockholders, and we believe they will be even more pleased with these improved terms, including additional regulatory commitments that reflect our confidence in our ability to obtain antitrust approval and are a direct result of our diligence. We are ready to move quickly to reach a merger agreement, bringing more value to shareholders, more competition to the industry, and more opportunities, including JetBlue’s incredibly strong culture and commitments to our Crewmembers, as we welcome Spirit Team Members into the JetBlue family.”

JetBlue sent a letter to the Board of Directors of Spirit containing its improved proposal.

The full letter follows:

June 20, 2022

Dear Members of the Board:

On behalf of JetBlue Airways Corporation (“JetBlue”), we would like to thank your team for the recent discussions. The dialogue and information provided strengthened our conviction that a combination between JetBlue and Spirit Airlines, Inc. (“Spirit”) would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities for Crewmembers and Team Members, and more value for stockholders.

Therefore, we are submitting a further update to our previous proposals (dated March 29, 2022, April 29, 2022, and June 6, 2022, respectively), consistent with your Board’s request and following completion of our due diligence review, to acquire all of the outstanding common stock of Spirit (our “Improved Proposal”). In addition, we included a revised draft of the merger agreement for the transaction reflecting the terms of our Improved Proposal. Our Improved Proposal is structured to maximize value and execution certainty for Spirit and its stockholders and is responsive to the concerns you previously raised. We firmly believe our Improved Proposal constitutes a decisively “Superior Proposal” as defined in the Frontier Agreement³.

Terms of Improved Proposal

Coupled with our June 6 proposal, our Improved Proposal clearly offers Spirit stockholders significantly more than the transaction with Frontier:

Increased price of $33.50 per Spirit share of common stock, in cash, which represents:
- an improvement of $2.00 per share, or 6.3%, compared to our June 6 proposal, and represents 9.2% of Spirit’s unaffected share price⁴;
- a 57.4% premium to Spirit’s closing share price of $21.28 on June 17, 2022;
- a 67.6% premium to the implied value of the Frontier transaction, which was $19.99 as of June 17, 2022; and
- a total Equity Value for Spirit of $3.7 billion and an Enterprise Value of $7.5 billion⁵.
Stronger regulatory commitment which includes:
- An express obligation to litigate and to divest assets of JetBlue and Spirit up to a material adverse effect on the combined JetBlue-Spirit, with a limited carve-out to this divestiture obligation for actions that would be reasonably likely to materially and adversely affect the anticipated benefits under JetBlue’s Northeast Alliance. This commitment significantly enhances our prior proposal and meaningfully exceeds the divestiture commitment from Frontier.
- A proactive offer to the Department of Justice of a remedy package that contemplates the divestiture of all Spirit assets located in New York and Boston so, as a result of the transaction, JetBlue will not increase its presence in the airports covered by our Northeast Alliance, as well as gates and related assets at Fort Lauderdale.
A reverse break-up fee of $350 million, or $3.20 per Spirit share⁶, payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons, representing:
- $100 million, or $0.91 per Spirit share, more than the reverse break-up fee Spirit and Frontier agreed to on June 2; and
- Approximately 15% of Spirit’s unaffected share price⁷, and approximately 78% of the original premium offered by Frontier⁸.
A prepaymentin the amount of $1.50 per share in cash, payable to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue; in the unlikely event the reverse break-up fee is payable, this upfront payment would reduce the payment to Spirit at the time of the termination of the merger agreement to approximately $186 million ($1.70 per share⁹).
As a result, Spirit stockholders would receive total aggregate consideration of $33.50 per share in cash, comprised of $32.00 per share in cash at the closing of the transaction and the prepayment of $1.50per share in cash.

As has been the case since our initial proposal on March 29, when compared to the inferior Frontier transaction, our Improved Proposal offers Spirit stockholders the compelling opportunity to receive a significant premium in cash in a transaction with more value and more certainty and stronger regulatory commitments, and, with the prepayment of a portion of the aggregate merger consideration as we have proposed, more value upfront. It is unambiguously a Superior Proposal. We are confident your stockholders will embrace our Improved Proposal, as they have done with our previous ones.

We are also confident our proposal is better for customers, delivering more of our unique combination of low fares and great service to customers nationwide, and better for Spirit Team Members, with higher pay and better benefits than either Spirit or Frontier, exciting career development opportunities, and JetBlue’s incredibly strong culture and set of values, which include never having furloughed any Crewmembers in our 22-year history, as well as industry-leading sustainability commitments.

As you know, we have dedicated a full team, significant management time, and advisor resources to the evaluation of Spirit and have finally been given the opportunity to conduct a review of Spirit’s business and operations. We have completed our due diligence and our Improved Proposal is a direct result of that process. We are now prepared to move expeditiously to execute definitive documentation.

While our strong preference is to reach a friendly, negotiated agreement with you, should the Spirit Board fail to declare our Improved Proposal a Superior Proposal, we fully intend to continue our “vote no” campaign against the Frontier transaction at your special meeting on June 30 as well as our tender offer.

We look forward to hearing from you soon and hope to finally move towards signing of definitive documentation for our superior transaction, clearly the optimal outcome for Spirit stockholders.

Sincerely,

/s/ Robin Hayes
Chief Executive Officer

JetBlue aircraft photo gallery:

Spirit is talking to both Frontier and JetBlue on their merger proposals

Spirit Airlines appears to be softening a bit with JetBlue with this announcement:

Spirit Airlines, Inc. today issued the following update regarding its ongoing discussions with Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc., and JetBlue Airways Corporation:

Ted Christie, President and CEO of Spirit, said, “Consistent with its fiduciary duties, Spirit’s Board of Directors is engaging in discussions with JetBlue with respect to the proposal received on June 6, 2022 and is also continuing to work with Frontier under the terms of the existing merger agreement between Spirit and Frontier. As part of this process, Frontier and JetBlue are being given access to the same due diligence information, on the same terms.

The Board expects to bring the process to a conclusion and provide an update to stockholders ahead of the Special Meeting of Spirit Stockholders scheduled for Thursday, June 30, 2022.”

Spirit continues to be bound by the terms of its merger agreement with Frontier, under which a “Superior Proposal” is defined as being both reasonably capable of being consummated and more favorable to Spirit’s stockholders from a financial point of view. Also, Spirit is providing information requested by the US Department of Justice and Federal Trade Commission for both proposed transactions as part of the ongoing regulatory review process.

Barclays and Morgan Stanley & Co. LLC are serving as financial advisors to Spirit, and Debevoise & Plimpton LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors.

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JetBlue submits improved superior proposal to acquire Spirit

JetBlue Airways today announced that it has submitted an improved proposal to the Board of Directors of Spirit Airlines to acquire all of the outstanding common stock of Spirit. JetBlue’s proposal is a further update to its previous proposals, and offers Spirit stockholders demonstrably superior value, more regulatory protections, and the prepayment of a portion of cash consideration:

Enhanced reverse break-up fee: JetBlue would provide a $350 million ($3.20 per Spirit share¹) reverse break-up fee, payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons. This represents an increase of $150 million, or $1.37 per Spirit share, to the reverse break-up fee JetBlue has previously offered to pay, and is $100 million greater than the amount being offer by Frontier.
Accelerated prepayment of $1.50 per share: JetBlue would prepay $1.50 per share in cash (approximately $164 million) of the reverse break-up fee, structured as a cash dividend to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue.²
Superior, all-cash premium: JetBlue’s proposal offers Spirit stockholders aggregate consideration of $31.50per share in cash, comprised of $30 per share in cash at the closing of the transaction and the prepayment of $1.50per share of the reverse break-up fee.

JetBlue has sent a letter to the Board of Directors of Spirit containing its improved proposal. In the letter, JetBlue CEO Robin Hayes states:

The full letter follows:

June 6, 2022

Dear Board of Directors:

On behalf of JetBlue Airways Corporation (“JetBlue”), we are submitting a further update to our previous proposals, dated March 29, 2022, and April 29, 2022, to acquire all of the outstanding common stock of Spirit Airlines, Inc. (“Spirit” and this letter, our “Improved Proposal”).

We remain fully committed to acquiring Spirit. After listening to your stockholders and reaffirming with our Board the significant benefits to all stakeholders of combining JetBlue and Spirit, we are pleased to submit this Improved Proposal, which we believe Spirit stockholders will welcome. We urge you to consider our Improved Proposal, which you are permitted to do under the Frontier Agreement³ and are required to do in the exercise of your fiduciary duties, and negotiate with us in good faith to reach a consensual transaction.

Terms of Improved Proposal

Our Improved Proposal offers Spirit stockholders:

An enhancedreverse break-up fee of $350 million, or $3.20 per Spirit share,⁴ payable to Spirit in the unlikely event the transaction is not consummated for antitrust reasons, representing:
- An increase of $150 million, or $1.37 per Spirit share, to the reverse break-up fee JetBlue previously offered to pay; and
- Approximately 15% of Spirit’s unaffected share price,⁵ and approximately 78% of the original premium offered by Frontier.⁶
A prepaymentof aportionof the reverse break-up feein the amount of $1.50 per share in cash, payable to Spirit stockholders promptly following the Spirit stockholder vote approving the combination between Spirit and JetBlue.
- The prepayment would be structured as a cash dividend⁷ to Spirit stockholders of $1.50 per share (approximately $164 million), representing a portion of our revised $3.20 per share reverse break-up fee, fully-funded by JetBlue to Spirit, that would not be reimbursable if the transaction is terminated for antitrust reasons.
- In the unlikely event the reverse break-up fee is payable, the upfront special dividend would reduce the amount to be paid to Spirit at the time of the termination of the merger agreement to approximately $186 million ($1.70per share).
In a negotiated transaction Spirit stockholders would receive total aggregate consideration of $31.50 per share in cash, comprised of $30 per share in cash at the closing of the transaction and the prepayment of $1.50 per share in cash of the reverse break-up fee.

When compared to the inferior Frontier transaction, our Improved Proposal offers:

More value and more certainty for Spirit stockholders with our all-cash offer. JetBlue offers Spirit stockholders aggregate consideration of $31.50 per share in cash, representing a 51% premium to the value of the Frontier transaction as of June 3, 2022,⁸ a 52% premium to Spirit’s latest closing price,⁹and a 45% premium to Spirit’s unaffected share price.¹⁰
More value upfront. Our $1.50 per share prepayment of a portion of the reverse break-up fee, payable promptly following Spirit stockholder approval of our transaction,¹¹allows Spirit stockholders to receive some cash sooner, irrespective of the ultimate outcome of the transaction.
More regulatory protections through our significant divestiture commitments and a $350 million reverse break-up fee, $100 million greater than the amount being offered by Frontier.

Combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for Crewmembers and Team Members, and more value for stockholders. The key features of our Improved Proposal – the up-front cash payment and increased reverse break-up fee – are not an illusion. This offer reflects the seriousness of our commitment and underscores our confidence in completing this transaction. Additionally, given the similar regulatory risks of the two transactions and the increased reverse break-up fee we are prepared to provide, we believe our Improved Proposal remains a Superior Proposal by any measure.

The amended terms of your merger agreement with Frontier are yet further evidence that your stockholders would have benefited had you engaged with us with in good faith at the outset. Clearly, Frontier only agreed to provide a reverse break-up fee and divestiture commitments because it was clear that your stockholders were going to vote down the inferior Frontier transaction. The addition of a reverse break-up fee one week before your stockholder vote is an acknowledgement that the regulatory profiles and likely timelines of both deals are in fact similar, something that both experts and many Spirit stockholders agree on by now.

Our Improved Proposal represents a compelling opportunity for your stockholders to receive a significant premium in cash, with greater value and certainty, and a higher reverse break-up fee than the inferior transaction with Frontier.

Accepting our Improved Proposal is in the best interests of your stockholders, and we urge you to immediately engage with us in good faith to finalize definitive documentation with JetBlue reflecting the terms of our Improved Proposal.

We look forward to hearing from you soon.

Sincerely,

Robin Hayes

Chief Executive Officer

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Frontier Airlines and Spirit Airlines announce an amended merger agreement

Spirit Airlines, Inc. and Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc., have announced an amendment to their previously announced merger agreement dated February 5, 2022.

Under the terms of the amended merger agreement, which has been unanimously approved by the boards of directors of both companies, Frontier would pay a reverse termination fee of $250 million, or $2.23 per share, to Spirit in the unlikely event the combination is not consummated for antitrust reasons.

William A. Franke, the Chair of Frontier’s Board of Directors and the managing partner of Indigo Partners, Frontier’s majority shareholder, said, “We continue to believe in the strategic rationale of a combined Spirit and Frontier, which brings together two complementary businesses to create America’s most competitive ultra-low fare airline. Given our conviction that regulators will find this combination to be pro-competitive, we have agreed to institute a reverse termination fee. We look forward to bringing these two companies together and delivering on the benefits for all stakeholders.”

Ted Christie, President and CEO of Spirit, said, “Since announcing our transaction with Frontier, we have had extensive constructive conversations with our stockholders, who have expressed support for the strategic rationale of our combination but a desire for additional stockholder protections. After discussing this feedback with the Frontier Board and management team, we have agreed to amend the merger agreement. We look forward to closing the transaction and bringing more ultra-low fares to more people in more places.”

“We continue to be excited about the combination with Spirit, which will create a true nationwide ultra-low fare airline to compete against the dominant ‘Big Four’ carriers and other high-cost airlines,” said Barry Biffle, President and CEO of Frontier. “We will continue to work closely with the Spirit team to successfully complete the transaction and deliver enhanced value to all of our stakeholders.”

“The combination of a higher reverse termination fee and a much greater likelihood to close in a Frontier merger provides substantially more regulatory protection for Spirit stockholders than the transaction proposed by JetBlue,” said Mac Gardner, Chairman of the Board of Spirit. “We look forward to closing the transaction with Frontier and giving Spirit stockholders the opportunity to benefit from pandemic recovery and share in approximately $500 million in annual net synergies.”

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Spirit Airlines disagrees with ISS recommendation on proposed transaction with Frontier

Spirit Airlines, Inc. has commented on a report from Institutional Shareholder Services (ISS) regarding the Company’s definitive merger agreement with Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc.

“We disagree with ISS’ recommendation against the Frontier-Spirit merger, which we continue to believe is in the best interest of Spirit stockholders. ISS appears overfocused on the absence of a reverse termination fee in that deal, and we have consistently maintained (as ISS also acknowledges) that the JetBlue proposal carries significantly greater regulatory obstacles, and JetBlue absolutely should pay Spirit stockholders more to compensate for that risk,” said Ted Christie, President and CEO of Spirit. “During the extensive discussions held between Spirit and JetBlue, JetBlue admitted that a lawsuit from DOJ seeking to block a merger with Spirit was a 100% certainty; therefore, JetBlue would have to prevail in or settle DOJ litigation in order to consummate the deal. Moreover, ISS did not recognize the elevated business disruption that Spirit would face from a lengthy review and litigation process ultimately resulting from a failed transaction with JetBlue after 18-24 months, nor did it adequately weigh the loss of substantial value Spirit stockholders otherwise would have received in a merger between Spirit and Frontier. We continue to believe the reverse termination fee is a moot point because there is nothing stopping JetBlue from walking away after achieving their goal of disrupting the Spirit-Frontier combination.

“Further, we disagree with ISS’ characterization that stockholders can reinvest the cash proceeds from a JetBlue transaction to maintain exposure to the airline industry recovery. Spirit stockholders would not receive $30 of cash per share for up to two years, if ever, during which time the airline industry recovery may have delivered value for stockholders that far exceeds JetBlue’s capped, inadequate and highly opportunistic offer. In contrast, the Frontier combination presents a compelling value creation opportunity due to the combination of cash and stock consideration, which gives our stockholders the chance to participate in the upside of the post-pandemic recovery in the airline industry upon close and benefit from up to $500 million in annual run-rate operating synergies.

“ISS also recommends Spirit stockholders do not vote JetBlue’s proxy card, indicating ISS still sees a potential path forward for Spirit to merge with Frontier. Overall, we ask our stockholders not to be distracted by JetBlue’s highly conditional tender offer, and our Board continues to unanimously recommend that Spirit stockholders vote FOR the merger proposal with Frontier,” said Christie.

In its report, ISS highlights:

“The Frontier offer does have a sound strategic rationale, as the combined company will be the fifth largest U.S. airline and largest ultra-low cost carrier, and the equity component of the merger consideration would allow shareholders to participate in the potential upside of the combined company.”
“Spirit’s argument that the proposed transaction with Frontier has an easier glide path to obtain regulatory approval than JetBlue’s proposed transaction does appear reasonable. While a transaction with Frontier does eliminate the largest ULCC competitor to Frontier, it would create an overall larger ULCC with a more robust nationwide network.”
“JetBlue’s proposal arguably faces more complex regulatory headwinds, particularly given the ongoing DOJ lawsuit against the NEA.”
“JetBlue’s proposal would likewise remove the largest ULCC from the market, whose planes would be retrofitted to JetBlue standards, resulting in less seats per plane and therefore removing capacity from the market; JetBlue fares are also typically higher than Spirit’s.”
“[JetBlue’s offer] is clearly a defensive offer that may also prove to be opportunistic, given that Spirit traded above $33.00 for a sustained period in 2021.”
“The board’s view that more patient shareholders would reap greater benefits by staying invested in a combined Frontier/Spirit could prove out over time, as there is robust strategic rationale for the proposed merger.”
“Investors reacted positively to the merger announcement with Frontier, driving the SAVE share price up by 17.2 percent to close at $25.46 per share, compared to a 2.8 percent rise in the US Global Jets Index and a 0.3 percent decline in the Russell 3000 Index on the same day.”

Merger Agreement with Frontier

As previously announced, Spirit Airlines, Inc. entered into a merger agreement with Frontier Group Holdings, Inc. on February 5, 2022. The merger is expected to close in the second half of 2022, subject to satisfaction of customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders. The Spirit Board of Directors unanimously recommends that stockholders vote FOR all proposals relating to the transaction with Frontier.

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Spirit Airlines Board of Directors urges stockholders to reject JetBlue tender offer

Spirit Airlines issued this statement:

Spirit Airlines, Inc. has announced that its Board of Directors, after consultation with its outside financial and legal advisors, has unanimously determined that the unsolicited tender offer from JetBlue Airways Corporation to acquire all outstanding shares of Spirit’s common stock for $30 per share in cash (the “Offer”) is NOT in the best interests of Spirit and its stockholders. In its comprehensive analysis, the Board determined that the JetBlue transaction faces substantial regulatory hurdles, especially while the Northeast Alliance with American Airlines remains in effect, and is, as a result, not reasonably capable of being consummated and is not superior to Spirit’s agreed merger transaction with Frontier.

Accordingly, the Spirit Board unanimously recommends that Spirit stockholders not tender any of their shares into the Offer and continues to recommend that stockholders vote FOR the merger agreement with Frontier. Additional information about the significant strategic and financial benefits of the merger with Frontier and voting instructions are at http://ir.spirit.com and in the proxy statement/prospectus mailed to Spirit stockholders on May 11, 2022.

“JetBlue’s tender offer has not addressed the core issue of the significant completion risk and insufficient protections for Spirit stockholders,” said Mac Gardner, Chairman of the Board of Directors for Spirit Airlines. “Based on our own research and the advice of antitrust and economic experts, our view is that the proposed combination of JetBlue and Spirit lacks any realistic likelihood of obtaining regulatory approval, while our company faces a long and bleak limbo period as we await resolution. In that scenario, a $1.83 per share reverse break-up fee will not come close to adequately compensating Spirit stockholders for the significant business disruption Spirit will face during what JetBlue acknowledges will be a protracted regulatory process. Our pending merger with Frontier is advancing as planned, and we continue to recommend that Spirit stockholders vote FOR the merger with Frontier on June 10th, as we believe the combination of these two ULCCs is the best way to deliver maximum valueto Spirit stockholders.”

The Spirit Board conducted a comprehensive review of the Offer and recommends Spirit stockholders reject the Offer for the following reasons:

• The JetBlue transaction faces very substantial regulatory hurdles, especially while the NEA is in effect

o SpiritdoesnotbelievethattheJetBluetransactionislikelytoreceiveregulatory approval.

o Spirit retained top-tier aviation and economic consultants and worked with JetBlue and its advisors for four weeks to reach an informed view about the regulatory risk posed by the JetBlue proposals of March 29 and April 29 and the subsequent JetBlue tender offer. In the end, after several weeks and counting, Spirit concluded that the consummation of the proposed JetBlue combination, with the NEA remaining in place, seemed almost inconceivable – especially given the cavalier manner in which JetBlue intends to address the significant regulatory risk.

o The U.S. Department of Justice (DOJ) is currently suing JetBlue and American Airlines, alleging that the NEA is anti-competitive. Not only Spirit, but also many other airlines and air travel constituencies have publicly opposed the NEA on grounds that it is anticompetitive. Spirit does not believe that the JetBlue proposal to acquire Spirit will be approved by the DOJ in light of that litigation.

o Moreover, Spirit does not believe the DOJ, or a court, will be persuaded that JetBlue should be allowed to form an anticompetitive alliance that aligns its interests with a legacy carrier (American) and then undertake an acquisition that will eliminate the largest ULCC carrier in the U.S. (Spirit).

o Nonetheless, by insisting on prioritizing its position in the NEA as it pursues a Spirit merger, JetBlue effectively imposes this heightened regulatory risk entirely on Spirit stockholders.

o Even putting aside the NEA, Spirit believes the DOJ – and a court – will be very concerned that a JetBlue-Spirit combination will result in a higher-cost/higher fare airline that would eliminate a lower-cost/lower fare airline and remove about half of the ULCC capacity in the United States.

o The conversion of Spirit aircraft to JetBlue configuration will result in significantly diminished capacity on former Spirit routes, and, as JetBlue has stated, will also result in higher prices for consumers.

• JetBlue’s proposed divestitures are highly unlikely to resolve the DOJ’s concerns given the NEA’s alignment of JetBlue’s and American’s incentives across the country

o JetBlue’s proposed divestiture of Spirit assets in New York and Boston does not address the broader competitive implications of effectively merging Spirit into JetBlue’s alliance with American.

o The DOJ has alleged that “the harms threatened by the [NEA] … extend well beyond Boston and New York City. … The [NEA] allows American to forgo independent growth that would have benefited consumers. By effectively absorbing JetBlue’s operations in Boston and New York City, American can reduce investments not just in those cities, but also in other parts of its network where it otherwise would maintain or add service. Consequently, consumers across the country will have fewer options and pay higher fares.”

o Current DOJ antitrust leadership has expressed deep skepticism about the effectiveness of divestiture remedies and a preference for seeking to block transactions rather than accept divestiture-based settlements.

• JetBlue’s offer puts the risk of the antitrust condition NOT being satisfied on Spirit stockholders

o Any JetBlue transaction cannot close without HSR approval, which even JetBlue concedes could take up to 24 months. Spirit shareholders are being asked to bear substantial risks without commensurate protections.

o The Spirit Board expects the DOJ would bring a lawsuit to block the acquisition, and that any such lawsuit is unlikely to be resolved until between 18 and 24 months after the date of JetBlue’s initial HSR filing.

o During the extensive discussions held between Spirit and JetBlue, JetBlue itself admitted that a lawsuit from DOJ seeking to block the merger was a 100% certainty; therefore, JetBlue would have to prevail or settle (which would be contrary to DOJ’s avowed enforcement approach) in order to consummate its proposed acquisition of Spirit.

• JetBlue’s conditions to the Offer also subject Spirit stockholders to significant risk from fluctuating market conditions and stock market volatility

o The Offer excuses JetBlue from consummating the transaction if there is any decline in either the Dow Jones, the S&P 500 or the NASDAQ-100 Index by an amount in excess of 10%, measured from the close of business on May 13, 2022, prior to receipt of regulatory approval, which could take up to two years.

o Since JetBlue first submitted its proposal to acquire Spirit on March 29, 2022, the Dow Jones is down 10.8%, the S&P 500 is down 15.3% and the NASDAQ-100 is down 21.7%.

• Debt financing for an acquisition of Spirit by JetBlue remains questionable

o According to JetBlue, the financing commitment letters have an expiration date 14 months from the date of the commitment letters, with certain possible extensions that are subject to (undisclosed) conditions. The Spirit Board believes the regulatory review and challenge process for any acquisition by JetBlue would likely require more than 14 months.

In public comments issued on Monday, May 16, 2022, JetBlue misleads Spirit and JetBlue stockholders with inaccurate statements and mischaracterizations. The facts are:

• Spirit Airlines’ independent Board is acting in the best interests of all Spirit stockholders and engaged constructively with JetBlue

o Seven of Spirit’s eight Board members are independent. The Board has been advised by outside legal counsel and financial advisors and conducted a thorough process in evaluating JetBlue’s original proposal.

o Spirit’s Board made the requisite determination to allow Spirit to enter into a non- disclosure agreement with JetBlue to allow discussions.

o Spirit shared projections with JetBlue’s financial advisors and provided voluminous documentary due diligence material through a secure virtual data room.

o Spirit’s antitrust advisors spent many hours, involving seven separate calls, with JetBlue’s antitrust advisors seeking to understand the anti-trust risks of the JetBlue proposal and JetBlue’s plans to address those risks.

o Following a two-hour call with the JetBlue CEO, CFO and members of its management team in which Spirit’s management team addressed all of the questions asked by the JetBlue team, JetBlue and its advisors thanked Spirit for their openness and transparency.

• Spirit believes JetBlue’s proposals and offer are a cynical attempt to disrupt Spirit’s merger with Frontier, which JetBlue views as a competitive threat

o JetBlue claims it has harbored an interest in a combination with Spirit for “many years.” Yet JetBlue waited over seven weeks after the announcement of the Frontier merger agreement to submit a proposal to acquire Spirit, and JetBlue chose to launch the Offer shortly after the merger proxy statement for the Frontier merger was mailed to Spirit stockholders. That timing does not seem coincidental.

o Spirit and JetBlue’s CEOs know each other well and Spirit and JetBlue speak regularly on general industry matters, especially recently as both carriers were managing through the pandemic, but JetBlue has never indicated any interest in a combination with Spirit. Moreover, Spirit’s former CEO sits on the Board of JetBlue. JetBlue’s familiarity with Spirit would have made it easy for it to initiate engagement regarding a combination at any time.

• JetBlue’s focus on Spirit appears to be an attempt to distract from the fact that JetBlue’s own business is in disarray

o Since March 29, the date of JetBlue’s initial proposal to acquire Spirit, JetBlue’s stock has fallen about 34%. Indeed, JetBlue’s stock price has repeatedly fallen whenever JetBlue makes public comments regarding a proposed transaction with Spirit. JetBluestockholders obviously agree that that their company’s quixotic offer for Spirit is a dead end, posing substantial risks to their own business.

o As noted in multiple public reports, JetBlue “has a host of issues to resolve in-house.” As stated by Emilie Feldman, a management professor at the University of Pennsylvania’s Wharton School, “A lot of times companies will do acquisitions to avoid having to fix their own house. Sometimes it’s better to let the acquisition go and fix your own business.” (CNBC, May 6, 2022).

o JetBlue has run last or near last in DOT operational metrics in 2022 and for the past several years.

• JetBlue’s claims about the so-called ‘JetBlue Effect’ are based on economic modeling that Spirit believes has significant defects and overstates the impact of JetBlue on legacy carriers, when in reality, it is Spirit that continues to be a check on other airlines’ fares – including JetBlue’s

o After receiving the summary output of JetBlue’s economic model from JetBlue’s advisors, Spirit’s economic consultants identified reasons to doubt that such an effect would significantly exceed any similar “ULCC effect.”

JetBlue’s illusory Offer would deprive Spirit stockholders of the long-term benefits and deprive consumers of savings expected to result from the Frontier merger

• Spirit stockholders would not have the opportunity to participate in the upside from airline industry recovery and benefits from the Frontier transaction

o JetBlue’s Offer comes at a time when airline stocks are trading significantly below their pre-pandemic levels. The airline industry recovering to pre-pandemic levels would alone deliver Spirit shareholders value well in excess of JetBlue’s offer.

o JetBlue is asking Spirit shareholders to submit to a cap on their value at $30/share, and be forced to wait for up to two years to receive their cash, while the rest of the industry’s shareholders get to participate in a full post-pandemic recovery.

o Unlike the Frontier transaction, in JetBlue’s Offer, Spirit stockholders will not participate in substantial ongoing synergies created in the combined business. In the Frontier combination, Spirit stockholders continue to own 48.5% of the combined company and thereby participate in its future growth.

• The Spirit and Frontier merger will create America’s most competitive ultra-low fare airline

o A combination of Spirit and Frontier is a merger of two ULCCs producing $1 billion of consumer benefit and synergies derived from more flying on existing assets.

o On a combined basis, the company would have annual revenues of ~$5.3 billion based on 2021 results.

o The combined airline will add new routes and offer more than 1,000 daily flights to over 145 destinations in 19 countries across complementary networks.

o Once combined, Frontier and Spirit expect to deliver annual run-rate operating synergies of $500 million once full integration is completed, which will be primarily driven by scale efficiencies and procurement savings across the enterprise with approximately $400 million in one-time costs.

The basis for the Board’s decision is set forth in the Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) filed today with the U.S. Securities and Exchange Commission.

Barclays and Morgan Stanley & Co. LLC are serving as financial advisors to Spirit, and Debevoise & Plimpton LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are serving as legal advisors.

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