The clock is ticking for Spirit Airlines (SAVE) and JetBlue Airways (JBLU) as they gear up for their joint appeal with the initial brief due on February 26. On the flip side, the Justice Department has been given until April 11 to come up with their response.
Here’s the backstory: U.S. District Court Judge William Young threw a wrench into the works by blocking the merger between Spirit Airlines (NYSE:SAVE) and JetBlue Airways (NASDAQ:JBLU). The judge’s concern? A potential hike in ticket prices for Spirit customers and a dent in competition within the airline industry.
Not ones to take a setback lying down, Spirit and JetBlue swiftly filed an appeal to the U.S. Court of Appeals for the First Circuit. Their plea? Fast-track the appeal process, citing the looming July 24 deadline for the merger.
Adding to the drama, JetBlue had previously hinted at potential stumbling blocks in meeting certain merger conditions by January 28, leaving the option to pull the plug if necessary.
But here’s where the plot thickens: The Justice Department is throwing shade at the idea of a speedy appeal, suggesting a hearing in June and arguing that the companies could stretch out the outside date. JetBlue, however, is playing the financing card, waving around the $3.5 billion it received, set to expire on July 24 unless the lenders give a nod for an extension.
In the latest twist, the First Circuit Court has set a deadline of February 26 for both companies to spill the beans in their initial briefs, giving the Justice Department until April 11 to counterpunch. The entire brief process is expected to wrap up by April 25.
The court order is dropping hints that they’d rather settle this matter during their June sitting, not leaving much room for extensions. As Spirit Airlines grapples with financial challenges and stakes its hopes on a successful merger, the outcome of this legal showdown will undoubtedly shape the future for both Spirit Airlines and JetBlue Airways.
