{"id":40261,"date":"2023-09-20T07:27:50","date_gmt":"2023-09-20T07:27:50","guid":{"rendered":"https:\/?p=40261"},"modified":"2023-09-20T07:29:16","modified_gmt":"2023-09-20T07:29:16","slug":"spirit-airlines-stock-takes-a-hit-amidst-jetblue-deal-dispute","status":"publish","type":"post","link":"https:\/\/www.stocktargetadvisor.com\/blog\/spirit-airlines-stock-takes-a-hit-amidst-jetblue-deal-dispute\/","title":{"rendered":"Spirit Airlines Stock Takes a Hit Amidst JetBlue Deal Dispute"},"content":{"rendered":"

Yesterday, shares of Spirit Airlines (SAVE:NYE<\/a>) saw a significant 5.8% drop in its stock value. This decline came in response to a recent report from Dealreporter, which shed light on the Department of Justice’s (DOJ) commitment to blocking the proposed acquisition of Spirit Airlines by JetBlue Airways (JBLU:NSD<\/a>). Investors are certainly feeling the pressure as this legal showdown continues, sending shockwaves through the entire airline sector. In fact, JetBlue Airways’ stock plummeted to a 52-week low of $4.57 in response to this latest development.<\/p>\n

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The Monopolistic Merger in Question:<\/span><\/h2>\n

JetBlue’s $3.8 billion acquisition of Spirit Airlines is closely examined by regulators for possible monopolistic effects. The DOJ argues it could harm competition and consumer choices, raising concerns about the industry’s competitiveness. The trial between the DOJ and JetBlue is set to commence on October 16, further magnifying uncertainties surrounding this deal.<\/span><\/p>\n

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JetBlue’s Strategic Moves:<\/h2>\n

In an attempt to garner regulatory approval, JetBlue recently announced plans to divest all of Spirit Airlines’ holdings at Boston and Newark airports, transferring them to Allegiant Travel (ALGT:NSD<\/a>).<\/p>\n

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JetBlue’s Divestiture Efforts:<\/h2>\n

Furthermore, JetBlue plans to hand over five gates and ground facilities at Fort Lauderdale’s airport, aiming to foster the growth of ultra-low-cost carriers. Earlier in June, JetBlue had also committed to divesting all of SAVE’s holdings at New York’s LaGuardia Airport to Frontier Group (ULCC:NSD<\/a>), another key player in the U.S. low-cost carrier segment. These divestiture measures have not alleviated the DOJ’s antitrust concerns, as they seem insufficient to address the merger’s anti-competitive issues.<\/p>\n

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Spirit Airlines Stock Financial Struggles<\/h2>\n

Spirit Airlines has recently faced its own set of challenges, including a downward revision of its Q3 2023 revenue forecast, citing escalating fuel prices and intensified promotional activity.<\/p>\n

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Broader Market Sentiment:<\/h2>\n

Analysts at Evercore ISI<\/a> maintain an “In-Line” rating while reducing the price target from USD 25 to USD 20 though he maintains a Hold rating. This adjusted rating reflects expectations of higher fuel costs in Q3. These increased costs will impact not only Spirit Airlines but also Frontier Airlines.<\/p>\n

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SAVE Ratings<\/a> by Stock Target Advisor<\/p>\n<\/div>\n