JetBlue says it may emerge from the deal to acquire Spirit Airlines

JetBlue Airways said Friday it could pull out of its $3.8 billion acquisition of Spirit Airlines after a federal judge blocked the deal.

The announcement comes just a week after JetBlue and Spirit said they would appeal the decision, which was made in an antitrust case brought by the Justice Department.

In a regulatory filing On Friday, JetBlue said the deal could be terminated after Sunday if certain conditions are not met. Spirit said in his own file that it disagreed with JetBlue's assertion and believed there is “no basis to terminate the deal.”

A federal judge in Boston blocked the proposed merger on Jan. 16, ruling that Spirit plays a key role in keeping airfares low and that a takeover by JetBlue would hurt travelers. The ruling was a victory for the Justice Department, which under President Biden has sought to limit corporate consolidation across the economy.

The companies said last week they were preparing an appeal. As part of the merger agreement, JetBlue agreed to pay Spirit and its shareholders a combined $470 million if regulators blocked the deal.

Spirit's stock price fell about 16 percent Friday morning. The shares have lost more than half their value since the deal was blocked as the company is unprofitable and investors worry the airline is taking on too much debt. Spirit has also been forced to ground some of its jets due to an engine problem.

The stock price of JetBlue, which could save billions of dollars by not appealing and moving forward with the deal, was up slightly Friday morning.