JetBlue bids for Spirit Airlines
05-05-2022, 06:00 PM
#713
Gets Weekends Off
Joined APC: Dec 2009
Position: 1Durrty5
Posts: 291
What could possibly explain this? A few events in the recent past stick out in my mind.
Spirit passed a poison pill amendment back in March of 2020, when all airline stocks were getting hammered, but they were the only airline to pass one as far as I know.
https://www.nasdaq.com/articles/spir...off-2020-03-30
Here's Ted Christie on it at the time:
"We are adopting the rights agreement to protect against parties seeking to take advantage of the current market environment to the detriment of Spirit and its shareholders," Christie said.
It was weird at the time, but as I recall it was generally shrugged off as a sign of the the craziness of the times. But why were no other similarly sized, publicly traded airlines acting similarly about the threat of a buyout?
If Robin's letter is factual, then it appears jetblue has been interested in acquiring spirit for some time now, perhaps even predating the pandemic, when Spirit's higher market cap was protecting the airline from a hostile takeover. A 75% drop in the stock price made a hostile takeover much easier.
2020 was an important year for jetblue. That was supposed to be the year jetblue's cost saving programs and new revenue initiatives were all going full bore in pursuit of $2.50-3.00 EPS. I wondered at the time why the hyperfocus on that EPS target. Beyond boosting share price, there wasn't a publicly stated goal for all of that effort. Looking back now, I think buying Spirit was that goal. Jetblue had already acknowledged the need for a merger to reach a point of scale to effectively compete when it attempted to buy VX, this was the next attempt. Spirit must have known, which explains the poison pill when the share price tanked.
Oh yeah, Ben Baldanza also joined the jetblue BOD in August of 2018.
https://www.businesswire.com/news/ho...f%20Directors.
Frontier IPO'd on March 31st of 2021 and made a net profit of $260 million.
https://www.pymnts.com/news/ipo/2021/frontier-airlines-raises-570-million-ipo-at-4-billion-valuation/
Spirit had 108 million shares outstanding on 2/4/2022. Frontier offered $2.13 cash per share, for a total value of a $230 million cash payment to shareholders.
In my best Columbo voice: Just one more thing, when did that spirit poison pill expire?
Spirit's poison pill amendment was good for 364 days, ending just days before the Frontier IPO.
https://www.clermontpartners.com/blo...l-in-covid-19/
There's ample evidence that JetBlue was interested in buying Spirit for some time and made serious decisions to make it happen. Spirit's and Indigo's behavior when put into context appears conspicuously related, whether intentionally or not. It's reasonable to state that the current spirit BOD and executive team has a better shot at continued employment with a F9 merger vs jetblue. In the case of the BOD, it's explicit, with 5 board seats on the line with the F9 deal. To have those prospects potentially snatched away from you at the last moment would feel pretty frustrating were I in that position.
This won't win any court case, but it bears consideration within the discussion happening here.
I'll save the spirit crew some time and suggest posting Charlie in front of the corkboard covered in string in response. I'll be owned so badly by that. But in return, I ask you to heed the advice of me and others on here, and don't underestimate the jetblue executives. They're formidable when it comes to operating in the legal and political world, focusing on that to the point of making the actual operation a lower priority leading to many of the issues occurring today. They're not running an airline, they're building a brand, it's a whole different ballgame than what you're used to.
05-05-2022, 06:35 PM
#714
The REAL Bluedriver
Joined APC: Sep 2011
Position: Airbus Capt
Posts: 6,905
Excellent analysis 701. I have to fully agree, Spirit's actions appear to be emotional and personal, not simply a course of business.
05-05-2022, 06:53 PM
#716
Gets Weekends Off
Joined APC: Jan 2016
Posts: 167
JetBlue bids for Spirit Airlines
I've been thinking about this a bit. The reaction by spirit management and the board doesn't seem like a standard corporate response to an unwanted or less than superior offer. VX was a better fit with jetblue from almost every perspective, network, equipment, corporate culture, etc, but they didn't respond to Alaska's offer this way.
What could possibly explain this? A few events in the recent past stick out in my mind.
Spirit passed a poison pill amendment back in March of 2020, when all airline stocks were getting hammered, but they were the only airline to pass one as far as I know.
https://www.nasdaq.com/articles/spir...off-2020-03-30
Here's Ted Christie on it at the time:
"We are adopting the rights agreement to protect against parties seeking to take advantage of the current market environment to the detriment of Spirit and its shareholders," Christie said.
It was weird at the time, but as I recall it was generally shrugged off as a sign of the the craziness of the times. But why were no other similarly sized, publicly traded airlines acting similarly about the threat of a buyout?
If Robin's letter is factual, then it appears jetblue has been interested in acquiring spirit for some time now, perhaps even predating the pandemic, when Spirit's higher market cap was protecting the airline from a hostile takeover. A 75% drop in the stock price made a hostile takeover much easier.
2020 was an important year for jetblue. That was supposed to be the year jetblue's cost saving programs and new revenue initiatives were all going full bore in pursuit of $2.50-3.00 EPS. I wondered at the time why the hyperfocus on that EPS target. Beyond boosting share price, there wasn't a publicly stated goal for all of that effort. Looking back now, I think buying Spirit was that goal. Jetblue had already acknowledged the need for a merger to reach a point of scale to effectively compete when it attempted to buy VX, this was the next attempt. Spirit must have known, which explains the poison pill when the share price tanked.
Oh yeah, Ben Baldanza also joined the jetblue BOD in August of 2018.
https://www.businesswire.com/news/ho...f%20Directors.
Frontier IPO'd on March 31st of 2021 and made a net profit of $260 million.
https://www.pymnts.com/news/ipo/2021/frontier-airlines-raises-570-million-ipo-at-4-billion-valuation/
Spirit had 108 million shares outstanding on 2/4/2022. Frontier offered $2.13 cash per share, for a total value of a $230 million cash payment to shareholders.
In my best Columbo voice: Just one more thing, when did that spirit poison pill expire?
Spirit's poison pill amendment was good for 364 days, ending just days before the Frontier IPO.
https://www.clermontpartners.com/blo...l-in-covid-19/
There's ample evidence that JetBlue was interested in buying Spirit for some time and made serious decisions to make it happen. Spirit's and Indigo's behavior when put into context appears conspicuously related, whether intentionally or not. It's reasonable to state that the current spirit BOD and executive team has a better shot at continued employment with a F9 merger vs jetblue. In the case of the BOD, it's explicit, with 5 board seats on the line with the F9 deal. To have those prospects potentially snatched away from you at the last moment would feel pretty frustrating were I in that position.
This won't win any court case, but it bears consideration within the discussion happening here.
I'll save the spirit crew some time and suggest posting Charlie in front of the corkboard covered in string in response. I'll be owned so badly by that. But in return, I ask you to heed the advice of me and others on here, and don't underestimate the jetblue executives. They're formidable when it comes to operating in the legal and political world, focusing on that to the point of making the actual operation a lower priority leading to many of the issues occurring today. They're not running an airline, they're building a brand, it's a whole different ballgame than what you're used to.
What could possibly explain this? A few events in the recent past stick out in my mind.
Spirit passed a poison pill amendment back in March of 2020, when all airline stocks were getting hammered, but they were the only airline to pass one as far as I know.
https://www.nasdaq.com/articles/spir...off-2020-03-30
Here's Ted Christie on it at the time:
"We are adopting the rights agreement to protect against parties seeking to take advantage of the current market environment to the detriment of Spirit and its shareholders," Christie said.
It was weird at the time, but as I recall it was generally shrugged off as a sign of the the craziness of the times. But why were no other similarly sized, publicly traded airlines acting similarly about the threat of a buyout?
If Robin's letter is factual, then it appears jetblue has been interested in acquiring spirit for some time now, perhaps even predating the pandemic, when Spirit's higher market cap was protecting the airline from a hostile takeover. A 75% drop in the stock price made a hostile takeover much easier.
2020 was an important year for jetblue. That was supposed to be the year jetblue's cost saving programs and new revenue initiatives were all going full bore in pursuit of $2.50-3.00 EPS. I wondered at the time why the hyperfocus on that EPS target. Beyond boosting share price, there wasn't a publicly stated goal for all of that effort. Looking back now, I think buying Spirit was that goal. Jetblue had already acknowledged the need for a merger to reach a point of scale to effectively compete when it attempted to buy VX, this was the next attempt. Spirit must have known, which explains the poison pill when the share price tanked.
Oh yeah, Ben Baldanza also joined the jetblue BOD in August of 2018.
https://www.businesswire.com/news/ho...f%20Directors.
Frontier IPO'd on March 31st of 2021 and made a net profit of $260 million.
https://www.pymnts.com/news/ipo/2021/frontier-airlines-raises-570-million-ipo-at-4-billion-valuation/
Spirit had 108 million shares outstanding on 2/4/2022. Frontier offered $2.13 cash per share, for a total value of a $230 million cash payment to shareholders.
In my best Columbo voice: Just one more thing, when did that spirit poison pill expire?
Spirit's poison pill amendment was good for 364 days, ending just days before the Frontier IPO.
https://www.clermontpartners.com/blo...l-in-covid-19/
There's ample evidence that JetBlue was interested in buying Spirit for some time and made serious decisions to make it happen. Spirit's and Indigo's behavior when put into context appears conspicuously related, whether intentionally or not. It's reasonable to state that the current spirit BOD and executive team has a better shot at continued employment with a F9 merger vs jetblue. In the case of the BOD, it's explicit, with 5 board seats on the line with the F9 deal. To have those prospects potentially snatched away from you at the last moment would feel pretty frustrating were I in that position.
This won't win any court case, but it bears consideration within the discussion happening here.
I'll save the spirit crew some time and suggest posting Charlie in front of the corkboard covered in string in response. I'll be owned so badly by that. But in return, I ask you to heed the advice of me and others on here, and don't underestimate the jetblue executives. They're formidable when it comes to operating in the legal and political world, focusing on that to the point of making the actual operation a lower priority leading to many of the issues occurring today. They're not running an airline, they're building a brand, it's a whole different ballgame than what you're used to.
This is bang on. The arrogance of Spirit BOD has now devolved into what I hear as mild panic. Just a bizarre earnings call. Never mind the $200 million in the hole.
Spirit forgets the DOT not too long ago had to remind them to issue refunds as a result of a meltdown.
Spirit has zero political traction in the cigar bars of DC. It is so funny they act like a Spirit/Frontier is a sure deal with no concessions even though there is more overlap between these two than the B6 pairing.
I really hope the Spirit board gets shown the door on this fiasco. JetBlue says Spirit is wildly overestimating earnings looking ahead. This doesn’t surprise me as the NK board still refuses to admit pilot staffing issues.
Spirit guy here who will lose seniority in a B6 deal, but I will gladly accept it for the big picture.
Last edited by Directautogroup; 05-05-2022 at 07:15 PM.
05-05-2022, 06:57 PM
#717
Gets Weekends Off
Joined APC: Dec 2009
Position: 1Durrty5
Posts: 291
Fallon was the least funny character in the cowbell sketch, what's your point?
You're playing into management's hand nicely though, so congrats on that. They'd love each of our pilot groups to fight amongst ourselves, trying to prove who's the most deserving of a merged airline, who's product is the best, who's dad can beat up the other's. It's all a distraction from the fact that this whole merger drama is about people with more money and power than any of us will ever know, playing with the money we made them through our own hard work and time away from family.
No matter how this shakes out, we're all going to depend on the other to negotiate a banger of a JCBA to pattern bargain off of and make this career worth the time and effort we put into it and the value we create for the people in corner offices high up in office buildings.
You're playing into management's hand nicely though, so congrats on that. They'd love each of our pilot groups to fight amongst ourselves, trying to prove who's the most deserving of a merged airline, who's product is the best, who's dad can beat up the other's. It's all a distraction from the fact that this whole merger drama is about people with more money and power than any of us will ever know, playing with the money we made them through our own hard work and time away from family.
No matter how this shakes out, we're all going to depend on the other to negotiate a banger of a JCBA to pattern bargain off of and make this career worth the time and effort we put into it and the value we create for the people in corner offices high up in office buildings.
05-05-2022, 07:04 PM
#718
Gets Weekends Off
Joined APC: Jan 2022
Posts: 191
This is bang on. The arrogance and collusion by the spirit board and really by Franke reeks of well Franke.
Spirit forgets the DOT not too long ago had to remind them to issue refunds as a result of a meltdown.
Spirit has zero political traction in the cigar bars of DC.
I really hope the Spirit board gets shown the door on this fiasco.
Spirit guy here who will lose seniority in a B6 deal, but I will gladly accept it for the big picture.
Sent from my iPhone using Tapatalk
Spirit forgets the DOT not too long ago had to remind them to issue refunds as a result of a meltdown.
Spirit has zero political traction in the cigar bars of DC.
I really hope the Spirit board gets shown the door on this fiasco.
Spirit guy here who will lose seniority in a B6 deal, but I will gladly accept it for the big picture.
Sent from my iPhone using Tapatalk
One more day under nk mgmt who is so bleached out and reel of Florida canal water. Give me some of that blue juice to cure this ailment. No really I want b6 all day please and out from this low cost low rate mgmt
05-05-2022, 07:12 PM
#719
Gets Weekends Off
Joined APC: Jul 2009
Posts: 156
05-05-2022, 07:31 PM
#720
Gets Weekends Off
Joined APC: Apr 2019
Posts: 1,079
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