Why Is Spirit Airlines Stock Sliding Friday?

Spirit Airlines, Inc SAVE stock plunged Friday as JetBlue Airways Corp JBLU disclosed its inability to comply with every provision of the $3.8 billion merger deal within the stipulated period. The update sent the prices of the target company down 18% Friday.

JetBlue also informed Spirit that the deal may be terminable on and after January 28, 2024.

Earlier this month the companies shared their plans to appeal a federal judge's decision to block the deal on antitrust grounds.

The budget airline's shares have dived by over 60% since the ruling.

JetBlue must pay Spirit $70 million if the deal does not materialize over antitrust grounds and $400 million to Spirit shareholders, Bloomberg reports.

United Airlines Holdings, Inc UAL, American Airlines Group, Inc AAL, Delta Air Lines, Inc DAL, Southwest Airlines Co LUV control 80% of the U.S. airline landscape. Therefore, the deal could have formed the fifth-largest carrier in the U.S., adding to Spirit's survival.

JetBlue needs Spirit's 200 aircraft and about 3,000 pilots as they battle a supply crunch.

Spirit expects fourth quarter 2023 revenue at the high end of the company's initial guidance. It expects sales of $1.32 billion versus the consensus of $1.31 billion.

Spirit as of December 31, 2023 had $1.3 billion of liquidity.

Price Action: SAVE shares are down 16.5% at $6.03 on the last check Friday.

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