Spirit Airlines shareholders have until Friday (10 June) to approve either JetBlue’s new merger proposal or that of Frontier Airlines, which remains Spirit’s preferred bidder.

JetBlue has now promised to pay Spirit $350 million if regulators block a merger, $100 million more than promised by Frontier. Under the new JetBlue offer, Spirit shareholders would receive around $164 million in dividends even if the deal is blocked. If it is approved, they will earn $30 per share plus the bonus. JetBlue said its bid was now worth 51% more than Frontier’s proposal. 

JetBlue wants to do a deal with Fort Lauderdale-based Spirit to add to its network and bolster its own operation in Florida, where Fort Lauderdale and Orlando are focus airports for JetBlue. 

Spirit serves 67 destinations in the US, Latin America and Caribbean. In acquiring Spirit, JetBlue believes it can better challenge American Airlines, Delta, United and budget giant Southwest Airlines.

However, Denver-based Frontier, which boasts 120 destinations in the US, Caribbean, Mexico and Central America wants to create an ultra-low-fare carrier to challenge budget brand Southwest Airlines.

Both mergers would be subject to scrutiny by regulators, with JetBlue’s opponents arguing its alliance with American Airlines on the east coast would scupper a merger with Spirit on competition grounds.

JetBlue chief executive Robin Hayes said: “Combining JetBlue and Spirit would create a true national competitor to the dominant legacy carriers, delivering low fares and a great experience for more customers, more opportunities and good paying jobs for crew members, and more value for stockholders. 

“The key features of our improved proposal – the up-front cash payment and increased reverse break-up fee – reflect the seriousness of our commitment and underscore our confidence in completing this transaction.”