JetBlue has raised the specter that it could walk away from its merger agreement with Spirit.
Last week, JetBlue and Spirit jointly filed a notice of appeal of the Jan. 16 federal district court decisionblocking the proposed deal. But in a Friday regulatory filing, JetBlue stated that the companies' agreement may be eligible for termination beginning this Sunday.
"JetBlue continues to evaluate its options under the merger agreement," the carrier said. "Unless and until such time as the merger agreement is terminated pursuant to its terms, JetBlue will continue to abide by all of its obligations."
Spirit quickly countered with its own regulatory filing, stating its disagreement with JetBlue's reading of their contract.
"Spirit believes there is no basis for terminating the merger agreement," the filing states. "Spirit will continue to abide by all of its obligations under the merger agreement, and it expects JetBlue to do the same."
Spirit's value has dropped sharply since JetBlue agreed to purchase the ultralow-cost carrier for $3.8 billion in July 2022. The airline has yet to turn a profit in the post-pandemic period and doesn't expect to return to profitability in the near term.
Last week, Spirit announced that it is assessing options for refinancing $1.1 billion in loyalty program debt that will come due in September amid speculation that it could decide to liquidate if the merger ultimately fails to go through. Spirit also informed investors that it had $1.3 billion in liquidity as of Dec. 31.
Spirit stock, which was trading at close to $25 at the time of the merger agreement, closed Friday's trading at $6.40, down more than 13% on the day.
The agreement between JetBlue and Spirit currently extends only through Sunday. But the agreement is structured to be automatically extended through July 24, provided that the parties have each met their contractual requirements.
JetBlue said Friday it had informed Spirit that certain conditions required by the agreement might not have been satisfied.
In his Jan. 16 ruling, U.S. District Court Judge William Young determined that a JetBlue acquisition of Spirit would be anticompetitive because it would harm budget-conscious travelers, especially on routes in which Spirit has significant market share.