JetBlue Airways has issued this statement:

JetBlue Airways today announced that it has filed a “Vote No” proxy statement urging Spirit Airlines shareholders to vote AGAINST the inferior, high risk, and low value Spirit/Frontier transaction at Spirit’s upcoming special meeting.

In addition, JetBlue commenced an all-cash, fully financed tender offer to acquire all of the outstanding shares of Spirit for $30 per share, without interest and less any required withholding taxes. Given the Spirit Board of Directors’ complete unwillingness to share the same necessary diligence information that was shared with Frontier, JetBlue is now offering to acquire Spirit for $30 per share in cash through a fully financed tender offer. This represents a 60% premium to the value of the Frontier transaction as of May 13, 2022 – a very compelling offer and higher than the premium implied by JetBlue’s original proposal. JetBlue is fully prepared to negotiate in good faith a consensual transaction at $33, subject to receiving necessary diligence.

JetBlue launched a website at www.JetBlueOffersMore.com and issued a letter to Spirit shareholders detailing the benefits of its transaction, the certainty of closing, and the misleading statements made by Spirit. In the letter, JetBlue CEO Robin Hayes states:

“JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders. Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges.”

“Yet the Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it. The Spirit Board based its rejection on unsupportable claims that are easily refuted.”

“Ask yourself a simple question: why won’t the Spirit Board engage with us constructively? The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.”

The letter goes on to note that JetBlue’s current proposal still offers more value and certainty for Spirit shareholders than Frontier, and stresses that the company is prepared to engage on the basis of its original proposal, if the Spirit Board acts in good faith:

“Based on the clear superiority of our offer, we expected the Spirit Board to engage constructively. Given its unwillingness to share necessary information or negotiate in good faith, we adjusted our price accordingly, but will work towards a consensual transaction at $33 per share, subject to receiving the information to support it.”

The full letter follows:

May 16, 2022

Dear Spirit Shareholder,

You have an important choice to make about your investment in Spirit Airlines.

We believe the Spirit Board of Directors (the “Spirit Board”) has failed to act in your best interests by refusing to engage constructively on our clearly superior proposal to acquire Spirit.

JetBlue offers more value – a significant premium in cash – more certainty, and more benefits for all stakeholders. Frontier offers less value, more risk, no divestiture commitments, and no reverse break-up fee, despite more overlap on non-stop routes and their own regulatory challenges.

Yet the Spirit Board failed to provide us the necessary diligence information it had provided Frontier and then summarily rejected our proposal, which addressed its regulatory concerns, without asking us even a single question about it. The Spirit Board based its rejection on unsupportable claims that are easily refuted.

Ask yourself a simple question: why won’t the Spirit Board engage with us constructively? The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.

Given the Spirit Board’s unjustified refusal to engage, we have decided to bring our proposal directly to the Spirit shareholders,and we urge you to vote “AGAINST” the Frontier transaction at Spirit’s upcoming special meeting. This will send a message to the Spirit Board that you want it to negotiate with us in good faith. We also launched an all-cash, fully financed tender offer to purchase all the outstanding shares of common stock at $30.00 per share and we encourage you to underscore your message to Spirit’s Board by tendering your shares into our offer. If the Spirit shareholders vote against the transaction with Frontier and compel the Spirit Board to negotiate with us in good faith, we will work towards a consensual transaction at $33 per share, subject to receiving the information to support it.

Our current proposal offers:

• More value and more certainty for Spirit shareholders with our ALL-CASH offer. JetBlue offers you $30 per share in cash, representing a 60% premium to the value of the Frontier transaction as of May 13, 2022¹, a 77% premium to Spirit’s latest closing price², and a 38% premium to Spirit’s unaffected share price³ – a very compelling value, and, no matter how you measure it, a higher premium than in our original proposal.
• Even more value potential after diligence and good faith negotiation. Based on the clear superiority of our offer, we expected the Spirit Board to engage constructively. Given its unwillingness to share necessary information or negotiate in good faith, we adjusted our price accordingly, but will work towards a consensual transaction at $33 per share, subject to receiving the information to support it.
• More regulatory certainty through our divestiture commitment and $200 million reverse break-up fee.

In contrast, the proposed Frontier transaction offers Spirit shareholders LESS:

• Less value. Our current proposal represents a compelling 60% premium to the value of the Frontier transaction as of May 13, 2022.
• Less value certainty. Frontier’s stock price has declined 30% since the announcement of the Frontier transaction⁴,resulting in approx. $770 million decrease in the value of the Frontier transaction to you. Plus, the future value of the Frontier / Spirit combined company’s stock is uncertain, especially in a continually challenging operational and market environment. Spirit’s and Frontier’s projections underpinning their transaction are based on flawed assumptions, including with respect to personnel attrition and wage inflation.
• Less regulatory commitments and less closing certainty. Despite having a similar regulatory profile to JetBlue, Frontier offers no divestiture commitment or reverse break-up fee.

JetBlue Offers More Value and Certainty to Spirit Shareholders – in Any Scenario…

Our current proposal provides superior value to the Frontier offer, regardless of whether either transaction is completed.

• When we complete our proposed transaction, Spirit shareholders would receive at least $30.00 per share in cash, compared to $18.81⁵ per share from the Frontier transaction.
• In the unlikely event our proposed transaction is not consummated, Spirit shareholders will receive a reverse break-up fee of approximately $1.83 per share, compared to no break-up fee in the Frontier transaction. We estimate that translates into total economic value of approximately $17 per share from JetBlue against approximately $15 in the Frontier transaction⁶.

… And Better Trading Value in the Short Term.

In addition, we expect the outcome of the Spirit special meeting to influence how the Spirit shares will trade in the short term. Based on the trading patterns since the Frontier transaction was announced, we expect that, if the transaction is approved, Spirit’s shares will trade at approximately $17⁷. On the other hand, basedon what we observed since our proposal became public, if the Frontier transaction is rejected, we expect Spirit shares to trade between approximately $23.1 and $25.5⁸, at least a 36% premium to Spirit’s latest closing share price⁹.

	Transaction Does Not Close	Transaction Closes	Short Term Trading Depending on Meeting Outcome
Frontier Transaction	~15	~19	~17
JetBlue Transaction	~17 (including RBF of 1.83/share)	30-33	~23-25

A vote AGAINST the Frontier transaction is a vote for a higher Spirit share price, regardless of any consideration concerning the actual consummation of either transaction. A vote for the Frontier transaction is a vote for a lower Spirit share price.

JetBlue Is Confident We Will Obtain Regulatory Approval.

A combined JetBlue-Spirit will create a more compelling and viable competitor to the Big Four airlines that control more than 80% of the U.S. market. JetBlue’s entry into new routes triggers fare decreases from legacy airlines that are more significant than those resulting from ultra-low-cost carriers; this phenomenon has been described as the “JetBlue Effect”.

Our recent economic analysis, using Department of Transportation Data, shows JetBlue’s presence on a nonstop route decreases legacy fares by ~16%, about three times as much as the presence of an ultra-low-cost carrier. This phenomenon is well established and foundational to JetBlue’s business model.

We are not the only ones who cite the JetBlue Effect. Coined by an MIT study in 2013, the JetBlue Effect has been acknowledged by the Department of Justice (DOJ) as recently as 2021 when it said, “JetBlue’s reputation for lowering fares is so well known in the airline industry that it has earned a name: the ‘JetBlue Effect.’ JetBlue’s record in Boston and New York illustrates why.”

We are confident we can address any regulatory concerns the Spirit Board, regulators or courts may have through:

• JetBlue’s expedited expansion and the resulting net fare decreases;
• demonstrated ease of other ultra-low-cost carriers’ continued expansion; and
• the divestitures we are prepared to undertake.

Don’t Be Misled: Spirit’s Transaction with Frontier Has Similar Regulatory Risk.

• Both transactions would create the #5 player with very similar market share. A combined JetBlue and Spirit would have an 8% market share based on full year 2021 seats compared to 7% for a combined Frontier and Spirit.
• Frontier overlaps with Spirit on significantly more nonstop routes (104) than JetBlue (54)¹⁰, and JetBlue has less overlap in flights, seats, and ASMs than Frontier in the metropolitan areas served by both¹¹.

Spirit’s Suggestion that Our Northeast Alliance Is a Regulatory Obstacle Has No Basis in Fact or in Law.

JetBlue’s Northeast Alliance is already demonstrating its positive benefits for customers in the Northeast. Regardless of what one thinks of the Northeast Alliance, it is irrelevant to our ability to complete the acquisition of Spirit.

• The Northeast Alliance is a limited, procompetitive alliance with American Airlines focused on unlocking growth for JetBlue in one of the nation’s most constrained geographies, the Northeast US. The alliance creates a compelling third competitor in a market previously dominated by two players and has already started delivering benefits to consumers.
• Divestitures: We will proactively offer the DOJ a remedy package that contemplates the divestiture of all Spirit assets located in the area covered by the Northeast Alliance (New York and Boston) so, as a result of our proposed transaction, we will not increase our presence in these airports.
• The Northeast Alliance litigation will go to trial this September, and we believe the outcome of that trial will not impact the outcome of the regulatory process for the acquisition of Spirit, which will likely take place later. If the court allows the DOJ to block the Northeast Alliance, by definition it will not be an obstacle to the acquisition of Spirit. If we are successful in defending the case, as we think we will be, it will be a testament that the alliance is procompetitive, disproving Spirit’s claim. In either case, the Northeast Alliance litigation does not impact JetBlue’s ability to acquire Spirit.

Given the clear superiority of our offer, including the regulatory commitments we have made to back up our high confidence in our ability to complete our transaction, why hasn’t the Spirit Board engaged?

Clearly because Spirit’s Board is prioritizing its own self-interest and personal relationships with Frontier over its shareholders’ interests.

There is good reason to believe the Spirit Board is not acting in the best interests of its own shareholders.

• Multiple Spirit directors involved in the decision to merge with Frontier have significant ties to Bill Franke, who appointed each to the Spirit Board when he was chairman of Spirit, and while Indigo Partners (the current controlling shareholder of Frontier) was a large shareholder of Spirit.
• This includes McIntyre Gardner, current chairman of Spirit, who replaced Mr. Franke, current chairman of Frontier, both of whom led the negotiations between the two companies.
• 5 of the 8 Spirit directors will continue as Board members of the Frontier / Spirit combined company if the Frontier transaction is consummated.

After eight months of discussions, Spirit agreed to an inferior transaction with Frontier without considering what other alternatives were available to Spirit’s shareholders. Further, the outsized concessions to Frontier by the Spirit Board do not reflect a meaningful effort to maximize shareholder value.

• The final terms of the Frontier transaction reflected only an 18.9% premium to the Spirit share price at the time of the announcement¹², compared to an average premium in precedent airline transactions of 86%¹³.
• The final value of the Frontier transaction reflected only an approximate 6% increase from the terms initially offered by Frontier¹⁴.
• The original value of the Frontier transaction of $25.83 per share was significantly below the standalone value resulting from the discounted cash flow analysis of Spirit’s financial advisors¹⁵.
• Frontier is not providing any divestiture commitment or a reverse break-up fee. The absence of both means that despite obvious hurdles for its own transaction, Frontier, at its own option, could simply decline to make any regulatory concessions and abandon the Frontier transaction at no cost (or compensation to Spirit or its shareholders).

Since our original proposal was made, the Spirit Board consistently refused to engage constructively with us.

• On April 7, the Spirit Board determined that our original proposal could reasonably be expected to lead to a “Superior Proposal”; and yet, it refused to provide the limited diligence information we requested which it had already provided to Frontier.
• On April 25, the Spirit Board requested we agree to unprecedented contractual terms as a precursor to sharing the diligence information we had originally requested.
  • These demands were off-market and contrasted starkly to the limited regulatory commitments made by Frontier, a transaction with a similar regulatory profile.
• On April 29, we presented an enhanced proposal, which was responsive to the concerns of the Spirit Board on closing certainty and included regulatory commitments representing a significant improvement from those offered by Frontier.
• Two days later, the Spirit Board rejected our enhanced proposal, without ever contacting us to discuss it, and, according to its own proxy, without considering the clearly superior economics.

By refusing to engage on our original proposal, the Spirit Board has deprived its shareholders of the most attractive value creating opportunity available to them.

WE URGE YOU TO SEND A MESSAGE TO THE SPIRIT BOARD BY VOTING “AGAINST” ALL PROPOSALS RELATED TO THE FRONTIER TRANSACTION AT THE SPIRIT SPECIAL MEETING ON JUNE 10, 2022 AND TENDERING YOUR SHARES INTO OUR OFFER.

In addition to voting “AGAINST” the Frontier transaction at the Spirit Special Meeting, we urge all Spirit shareholders voting against the Frontier transaction to exercise their appraisal rights under Section 262 of the Delaware General Corporation Law, which entitles Spirit shareholders who perfect these rights to the fair value of their shares, as determined by a Delaware court. Spirit, by admission of its own financial advisors, is worth more than the value of the Frontier transaction and this and the superior value of our current proposal, as well as our original proposal, would be factors used by the court in determining fair value of your shares. If the Spirit Board continues to refuse to negotiate with us and the Frontier transaction is approved, appraisal is the only way to capture the value included in our proposals. Please consult your legal advisor before exercising appraisal rights.

Additional details about JetBlue’s superior offer can be found at JetBlueOffersMore.com.

Protect Your Own Best Interests

Our proposal represents a compelling opportunity to receive a significant premium in cash, with greater value and certainty than the Frontier transaction. Spirit’s Board has prevented you from receiving it.

We are fully committed to pursuing our original $33 per share proposal. We urge you to protect your own best interests. Let the Spirit Board know you want the opportunity to receive our superior offer by voting AGAINST the Frontier transaction and tendering your shares in our cash tender offer.

Sincerely,
Robin Hayes
Chief Executive Officer

JetBlue aircraft photo gallery:

JetBlue Airways today announced it has enhanced its proposal to the Board of Directors of Spirit Airlines to acquire all of the outstanding common stock of Spirit for $33 cash per share. The enhanced proposal offers Spirit shareholders both superior financial value and greater certainty than the Frontier transaction:

• Divestiture commitment: If necessary, JetBlue would agree to divest assets of JetBlue and Spirit up to a material adverse effect on Spirit, with a limited carve-out for actions that would adversely impact JetBlue’s Northeast Alliance (NEA) with American Airlines.

• Remedy package to address NEA and regulatory concerns: JetBlue would offer a remedy package that includes the divestiture of all Spirit assets in New York and Boston so that JetBlue does not increase its presence in the airports covered by the NEA. The package would also include gates and assets at other airports, including Fort Lauderdale.

• Reverse break-up fee: JetBlue would provide for a $200 million reverse break-up fee, representing approximately $1.80 per Spirit share, that would become payable to Spirit in the unlikely event the JetBlue transaction is not consummated for antitrust reasons.

• Superior, all-cash premium: JetBlue’s proposal continues to offer Spirit shareholders $33 in cash per common share, a 47% premium to the value of the Frontier transaction as of April 29, 2022 (a) and a 52% premium to Spirit’s share price as of February 4, 2022 (b) (the last trading day prior to the Spirit-Frontier announcement).

“By creating a national competitor to the Big Four airlines, this transaction would deliver meaningful benefits for customers, superior value for shareholders of both airlines, and new opportunities for our combined crewmembers,” said Robin Hayes, chief executive officer, JetBlue. “We have confidence that we can complete this transaction to bring more low fares and great service to more customers. A JetBlue-Spirit combination will deliver enhanced financial strength and accelerate revenue growth and profitability for JetBlue shareholders.”

The regulatory commitments in JetBlue’s enhanced offer represent a significant improvement compared to those offered by Frontier. The revised offer comes after Spirit limited JetBlue’s access to important due diligence data yet requested unprecedented commitments from JetBlue that far exceed those in prior airline transactions.

“Spirit shareholders would be better off with the certainty of our substantial cash premium, regulatory commitments, and reverse break-up fee protection,” Hayes said. “The Frontier transaction has a similar regulatory profile to ours but offers no divestiture commitment and no reverse break-up fee, while the uncertain value of Frontier’s stock exposes Spirit shareholders to significant risk. We hope the Spirit Board will now recognize that ours is clearly a superior proposal and engage with us more constructively than they have to date. We are making our offer public so their shareholders are aware this attractive value-creating opportunity is available to them.”

Spirit shareholders will assume a number of risks if the Frontier transaction moves forward:

• Frontier is not required to undertake any divestitures to obtain the necessary regulatory approvals to close its transaction, despite having greater overlap with Spirit on nonstop routes than JetBlue does, among other regulatory hurdles.

• Frontier is not required to pay a reverse break-up fee if the transaction is not consummated for antitrust reasons even though the Frontier transaction has a similar regulatory profile as the proposed transaction with JetBlue.

• The value of Frontier’s stock, the basis for the transaction’s value to Spirit shareholders, is subject to significant risks and has already declined approximately 14% since Frontier’s offer was announced. Specifically, the value of Frontier’s stock declined from $12.39 on February 4, 2022, to $10.61 on April 29, 2022, which translated into a deterioration of the value of the Frontier transaction of $3.41 per Spirit share or approximately $370 million.

• The financial projections underpinning the transaction with Frontier are based on unrealistically optimistic assumptions, especially with respect to costs associated with personnel attrition and wage inflation. Their model does not consider any wage increases for team members, including pilots, at a time of high attrition and an anticipated shortage of pilots.

JetBlue Effect 3x Greater than ULCCs; Similar Regulatory Profile to Frontier
A combined JetBlue-Spirit will create a more compelling national low-fare competitor to challenge the Big Four airlines that control more than 80% of the U.S. market. When JetBlue introduces its unique combination of low fares and award-winning service onto new routes, legacy carriers lower their fares and customers win with more choice. With its positive effect on competition, and backed by its regulatory commitments, JetBlue has a high degree of confidence in its ability to achieve regulatory approval of its acquisition of Spirit.

• JetBlue’s entry into new nonstop routes triggers fare decreases from legacy airlines that are more significant than those resulting from ultra-low-cost carriers (ULCCs) – approximately 16%, or three times the result of ULCCs on legacy nonstop routes – known as the JetBlue Effect.

• The faster expansion of JetBlue and the JetBlue Effect, coupled with a proposed remedy package and the continued expansion of other ULCCs, will address regulatory concerns that Spirit, the regulators, or the courts may have.

• Both transactions would result in companies of similar size, creating the No. 5 U.S. airline: JetBlue/Spirit would have a 9% market share based on full year 2022 seats compared to 8% for a combined Frontier/Spirit.

• Contrary to common misperceptions, JetBlue has significantly less overlap with Spirit in terms of flights, seats, and ASMs than Frontier in the metropolitan areas served by both (c). JetBlue overlaps with Spirit only on 48 nonstop routes compared to Spirit and Frontier’s overlap on 76 nonstop routes (d).

• The NEA – which JetBlue strongly believes will be allowed to continue because the alliance is delivering the customer benefits promised – is not a factor in this transaction. Given the remedy package, JetBlue’s analysis finds that the presence of the NEA would have no meaningful economic effect in a JetBlue-Spirit transaction.

“Customers shouldn’t have to choose between a low fare and a great experience, and with JetBlue, it’s possible for customers to have both,” Hayes said. “Both the NEA and the proposed Spirit transaction are strategic actions that accelerate our existing growth plan and bring the JetBlue Effect to more customers in the Northeast, Florida, and around the country. By bringing together the power of the JetBlue and Spirit teams, this combination would strengthen JetBlue’s ability to grow, deliver outstanding service, and compete in a domestic market dominated by the four largest airlines. We look forward to delivering these benefits to all stakeholders once Spirit determines our proposal to be superior and we close the transaction.”

Supporting Information
JetBlue has posted updated slides for investors on its investor relations website at the following web address: http://investor.jetblue.com.

Advisors
Goldman Sachs & Co. LLC is serving as JetBlue’s financial advisor and Shearman & Sterling LLP is serving as JetBlue’s legal advisor.

(a) Represents premium over the value of the Frontier transaction of $22.42 as of April 29, 2022, based on Frontier’s last closing price and the terms of the merger agreement between Spirit and Frontier.
(b) Represents premium over Spirit’s $21.73 closing share price on February 4, 2022.
(c) Based on full-year data for both 2019 and 2021 based on scheduled flights/seats/ASMs.
(d) Based on Q1-Q3 2021 DOT data.

JetBlue Airways has welcomed the determination by the Board of Directors of Spirit Airlines that JetBlue’s offer to acquire Spirit could reasonably be likely to lead to a “Superior Proposal” under the terms of its current merger agreement with Frontier.

“We are pleased the Spirit Board recognizes the compelling value for all stakeholders that JetBlue has offered,” said Robin Hayes, chief executive officer, JetBlue. “We believe JetBlue is the best partner for Spirit, and we look forward to engaging with the Spirit Board to finalize our combination, to create a national low-fare challenger to the four large dominant U.S. carriers that will result in lower fares and better service for customers. As a combined company, we expect we will be able to deliver superior value on a national scale to customers, crewmembers, communities, and shareholders.”

Under the terms of JetBlue’s offer, Spirit shareholders would acquire Spirit for $33 per share in cash, implying a fully diluted equity value of $3.6 billion and providing full and certain value to Spirit shareholders. The proposal represents a premium of 52% to Spirit’s undisturbed share price on February 4, 2022, and a premium of 50% to Spirit’s closing share price on April 4, 2022.

The offer is subject to negotiation and execution of a definitive merger agreement between JetBlue and Spirit and would be subject to approval of Spirit’s Board of Directors, and completion of the transaction would be subject to customary closing conditions, including receipt of required regulatory approvals and approval of Spirit’s stockholders. Completion of the transaction would not be subject to any financing condition.

Goldman Sachs & Co. LLC is serving as JetBlue’s financial advisor and Shearman & Sterling LLP is serving as JetBlue’s legal advisor.

Spirit Airlines has made this announcement:

Spirit Airlines, Inc. has announced that its Board of Directors has determined, after consultation with the Company’s outside financial and legal advisors, that the unsolicited proposal received from JetBlue Airways to acquire Spirit in an all-cash transaction for $33.00 per share could reasonably be likely to lead to a “Superior Proposal” as defined in Spirit’s merger agreement with Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc.

Spirit intends to engage in discussions with JetBlue with respect to JetBlue’s proposal, in accordance with the terms of the Company’s merger agreement with Frontier.

Spirit remains bound by the terms of the merger agreement with Frontier, and Spirit’s Board has not determined that JetBlue’s proposal in fact constitutes a Superior Proposal as defined in the merger agreement with Frontier.

In addition, Spirit notes that there can be no assurance that the discussions with JetBlue will result in a transaction. Spirit shareholders do not need to take any action at this time, and Spirit’s Board has made no change to its recommendation that its shareholders adopt the merger agreement with Frontier.

Barclays and Morgan Stanley & Co. LLC are serving as financial advisors to Spirit and Debevoise & Plimpton LLP is serving as legal advisor.

Spirit Airlines has made this announcement:

Spirit Airlines, Inc. today announced that it has received an unsolicited proposal from JetBlue Airways to acquire all of the outstanding shares of Spirit’s common stock in an all-cash transaction for $33.00 per share.

Consistent with its fiduciary duties, the Spirit Board of Directors will work with its financial and legal advisors to evaluate JetBlue’s proposal and pursue the course of action it determines to be in the best interests of Spirit and its stockholders. The Board will conduct this evaluation in accordance with the terms of the Company’s merger agreement with Frontier and respond in due course. Spirit shareholders do not need to take any action at this time.

As announced on February 7, 2022, Spirit entered into a merger agreement with Frontier Group Holdings, Inc., parent company of Frontier Airlines, Inc., under which Spirit and Frontier would combine in a stock and cash transaction. Under the terms of the merger agreement, Spirit equity holders would receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own. The transaction is subject to customary closing conditions, including completion of the regulatory review process and approval by Spirit stockholders.

Barclays and Morgan Stanley & Co. LLC are serving as financial advisors to Spirit and Debevoise & Plimpton LLP is serving as legal advisor.

JetBlue Airways followed with this statement:

JetBlue Airways today confirmed it has submitted a proposal to the Board of Directors of Spirit Airlines to acquire Spirit for $33 per share in cash, implying a fully diluted equity value of $3.6 billion and providing full and certain value to Spirit shareholders. The proposal represents a premium of 52% to Spirit’s undisturbed share price on February 4, 2022¹, and a premium of 50% to Spirit’s closing share price on April 4, 2022². JetBlue firmly believes its proposal constitutes a “superior proposal” under Spirit’s merger agreement with Frontier and represents the most attractive opportunity for Spirit’s shareholders.

The combination of the two airlines would position JetBlue as the most compelling national low-fare challenger to the four large dominant U.S. carriers by accelerating JetBlue’s growth and expanding the reach of the “JetBlue Effect,” which occurs when legacy carriers react to JetBlue’s unique combination of low fares and award-winning customer service with lower fares. JetBlue triggers significantly greater fare decreases from legacy airlines when it enters a new market than when ultra-low-cost carriers enter a market.

Challenges the Dominant Carriers with Low Fares and Award-Winning Customer Service

In the 22 years since JetBlue first brought low fares to New York, airline mergers have created a landscape where the four largest U.S. carriers control more than 80 percent of the domestic market, to the detriment of consumers. The combination of JetBlue and Spirit would create the fifth largest domestic airline, better positioning it on a national level as a customer-centric, low-fare alternative to the dominant “Big Four” airlines.

JetBlue is loved by customers for its award-winning onboard service, featuring the most legroom in coach (a); free and fast Fly-Fi broadband internet (b); complimentary and unlimited name-brand snacks and soft drinks; and free, live DIRECTV® programming at every seat. The current merger proposal assumes the rebranding and retrofitting of Spirit’s fleet as JetBlue, introducing a superior onboard experience to Spirit customers.

“While JetBlue and Spirit are different in many ways, we also have much in common, including a focus on keeping our costs low so we can profitably expand and offer an attractive alternative to the dominant ‘Big Four’ airlines. We would conduct a full review of Spirit’s product offering, operational and customer technology, and talent pool to optimize the combined airline,” said Hayes.

Builds on Its Northeast Alliance with American Airlines While Further Deepening JetBlue’s Commitment to New York and Florida

JetBlue has established deep roots in New York, where it has long been New York’s Hometown Airline®. The combined company would maintain the JetBlue brand and continue to be based in New York City.

Through its successful Northeast Alliance (NEA) with American Airlines, JetBlue is currently experiencing significant growth in New York and Boston. In the New York area, JetBlue plans to grow from 200 to nearly 300 daily flights across JFK, LaGuardia, and Newark airports this year. JetBlue’s expanded presence is already significantly benefitting the community, with plans to hire 5,000 new crewmembers in the New York-New Jersey region this year and offering travelers in and out of the New York and Boston areas more choices, low fares, and JetBlue’s award-winning experience. The combination with Spirit would complement the NEA’s positive impact in the Northeast by similarly expanding JetBlue’s presence nationwide.

JetBlue has a long history in Florida, starting with the airline’s first revenue flight in 2000 between New York and Fort Lauderdale. With Spirit’s existing headquarters in the Fort Lauderdale area and presence at Fort Lauderdale-Hollywood International Airport (FLL), JetBlue would have the opportunity to deepen its longstanding commitment to Florida. Both Fort Lauderdale and Orlando are JetBlue focus cities, and its JetBlue Travel Products subsidiary – best known for its fast-growing JetBlue Vacations and Paisly product offerings – is also based in the Fort Lauderdale area. The combined airline would offer more than 170 daily flights at FLL, building JetBlue’s relevance as a stronger low-fare competitor in South Florida. At Orlando International Airport (MCO), JetBlue would grow to more than 130 daily flights. JetBlue maintains its training campus and a customer support center in Orlando, and would plan for significant expansion in Florida to support the larger, combined airline.

Offers Crewmembers Greater Opportunities Supported by JetBlue’s Differentiated Culture

JetBlue’s differentiated culture has made it a leading place to work since its first flight in 2000. Supported by JetBlue’s mission to Inspire Humanity and its values-based culture, the combined airline would have 32,000 crewmembers with plans to hire more as the airline grows.

By bringing together the power of the JetBlue and Spirit teams, with their shared commitment to customers and innovation, the combination would strengthen JetBlue’s ability to grow, deliver outstanding service, and compete in a domestic market dominated by the four largest airlines. A larger, financially stronger JetBlue would provide current and future crewmembers with more career growth opportunities, broader travel benefits, more opportunities to make a bigger difference in the communities JetBlue and Spirit serve, and a deeper bench of intellectual capital to support the future growth of the airline.

JetBlue is committed to working with labor leaders representing crewmembers and team members at both airlines to ensure the combination supports the needs of those that operate the airline, especially as Spirit team members join JetBlue. JetBlue intends to continue having direct crewmembers in places where it has them today and would insource Spirit roles in those cities. In locations where JetBlue does not currently insource, it would plan to conduct a full review to evaluate Spirit’s staffing model and determine the optimal path forward for the combined company.

Unlocks JetBlue Growth Across the U.S., Caribbean, and Latin America

The proposed transaction would turbocharge JetBlue’s network strategy, diversifying and expanding JetBlue’s footprint across the U.S., Caribbean, and Latin America. The combined network would serve more than 77 million customers annually on more than 1,700 daily flights to over 130 destinations in 27 countries from Peru to the United Kingdom – increasing customer options with a significantly broader network and increasing relevance and connectivity in JetBlue’s focus cities.

The transaction would allow JetBlue to grow in its focus cities like Los Angeles, Fort Lauderdale/Hollywood, Orlando, and San Juan, as well as in legacy hubs where the dominant carriers control with high fares, including Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami. The combination would introduce JetBlue for the first time to new destinations, including St. Louis; Memphis, Tenn.; Louisville, Ky., Atlantic City, N.J.; Myrtle Beach, S.C.; and four additional destinations in Colombia.

The combination would leverage JetBlue and Spirit’s complementary Airbus fleet and order book to drive sustained, profitable growth. The combined airline would have a fleet of 455 aircraft with 312 Airbus aircraft on order. The joint fleet would be one of the youngest and most fuel efficient in the industry. With JetBlue’s Embraer E190 fleet set for retirement, a common Airbus fleet and engine commonality would simplify integration, reducing the need for additional training and offering opportunities to better utilize spares, parts, and manufacturer support across both airlines.

Expands JetBlue’s Goal to Achieve Net Zero Carbon Emissions Ahead of Industry

JetBlue is taking bold steps to address its emissions and reduce its contribution to climate change. Its combined fleet with Spirit would accelerate its transition to next generation aircraft composed of modern and fuel-efficient aircraft to achieve its sustainability goals. JetBlue plans to achieve net zero carbon emissions by 2040 – 10 years ahead of the broader industry’s goal. JetBlue’s sustainability programs aim to:

• Decrease aircraft emissions 25% per available seat mile (ASM) by 2030 from 2015 levels, excluding offsets.
• Convert 10% of total jet fuel to blended sustainable aviation fuel by 2030, and 30% in New York.
• Convert 40% of three main ground service equipment vehicle types to electric by 2025 and 50% by 2030.
• Eliminate single-use plastic service ware where possible. Where not possible, ensure plastic is recyclable.
• Maintain at least an 80% recycling rate for audited domestic flights.

Delivers Superior Value and High Degree of Certainty for All Shareholders

JetBlue’s proposal offers Spirit shareholders full and certain value, and a high degree of certainty. The proposal values Spirit at $33 per share in cash, which represents:

• A 52%¹ premium to Spirit’s undisturbed share price as of February 4, 2022, the last trading day before the Frontier transaction announcement.
• A 50%² premium to Spirit’s closing price on April 4, 2022, or a premium of $11.01 per share in cash to Spirit shareholders.
• A 37%³ premium to the value implied by the Frontier transaction as of April 4, 2022.
• An implied aggregate equity value of $3.6 billion and an adjusted enterprise value of $7.3 billion for Spirit.⁴

No JetBlue shareholder vote is required to complete the proposed transaction, which will not be subject to financing contingency. JetBlue has approximately $2.8 billion of cash on hand as of December 31, 2021, and has a variety of unencumbered assets available to finance, worth in aggregate approximately $9 billion.

The proposed transaction is expected to deliver $600-700 million in net annual synergies once integration is complete, driven in large part by expanded customer offerings resulting from the greater scale of the network. The combined airline is projected to have annual revenues of approximately $11.9 billion based on 2019 revenues. JetBlue expects the transaction to be accretive to earnings per share in the first full year, excluding integration costs.

Given its conviction in securing the necessary regulatory approvals, JetBlue is highly confident that its proposed transaction would be completed on a timely basis and on a timeframe generally consistent with the pending transaction with Frontier. JetBlue’s proposal contemplates that the definitive agreement for the proposed transaction would contain contractual commitments designed to address any regulatory concern, including, while JetBlue is highly confident in the completion of the transaction, a “reverse break-up fee” that would become payable to Spirit in the unlikely event the proposed transaction is not consummated for antitrust reasons. These terms represent a meaningful improvement compared to the terms contemplated in the pending transaction with Frontier.

Transaction Details

JetBlue intends to fund the transaction with cash on hand and debt financing led by Goldman Sachs & Co. LLC.

The execution of a definitive merger agreement between JetBlue and Spirit would be subject to approval by each company’s Board of Directors and completion of the transaction would be subject to customary closing conditions, including receipt of required regulatory approvals and approval of Spirit’s shareholders.