Spirit still prefers bid from Frontier Airlines over JetBlue

Spirit Airlines said Monday that it still supports Frontier Airlines’ US$2.9 billion takeover bid for the airline, saying it was more likely to win regulatory approval than JetBlue’s competing US$3.6 billion offer.

Spirit said antitrust regulators are unlikely to approve JetBlue’s offer because of JetBlue’s alliance with American Airlines in the northeast, a deal that the United States Justice Department is suing to block.

“We struggle to understand how JetBlue can believe” that the Justice Department or a court would let JetBlue strike a deal with American, then buy Spirit, eliminating the nation’s largest low-cost airline, the Spirit board said in a letter to JetBlue directors.

JetBlue rejected Spirit’s view, especially after promising last week to make concessions designed to assure regulatory approval of its offer. JetBlue’s CEO seemed to raise the possibility of a hostile takeover bid.

Shares of Miramar, Florida-based Spirit sank more than 8% in afternoon trading. New York-based JetBlue’s stock gained 1%, while shares of Denver-based Frontier fell 4%.