The airline said it had informed Spirit that the merger agreement might be terminated on and after Sunday due to the unmet conditions.
JetBlue said it continues to evaluate options under the agreement and, unless the agreement is terminated, it would abide by its merger obligations.
In response, Spirit said there was no basis for terminating the merger agreement and it would continue to abide by its obligations and was expecting JetBlue to do the same.
The termination of the deal may deepen the gloom at Spirit.
The airline has struggled to post a profit due to increased operating costs and supply chain issues, raising doubts about its ability to pay down debt due to mature next year.
Last week, Spirit said it was assessing options to refinance its 2025 debt maturities, including $1.1 billion debt that was due.
Earlier this month, a US judge blocked the low-cost airline’s planned merger with JetBlue, after finding that the proposed deal could threaten competition in the US aviation market and harm ticket prices.
However, JetBlue is mindful that Spirit’s business has deteriorated significantly since the two agreed on the tie-up in July 2022, sources have told Reuters.
If the appeals court reaffirms the lower court’s ruling, “JetBlue shareholders could breathe a sigh of relief that the carrier would not have to assume Spirit Airlines’ high debt load or its cash-burning operations,” Citi analyst Stephen Trent wrote in a note.