JetBlue Airways (JBLU) and Spirit Airlines (SAVE) are filing for an expedited appeal of a court ruling that blocked their $3.8 billion merger.
Shares of Spirit rose nearly 4% in early trading while JetBlue fell 6%.
“The appeal is a formality of what investors already expected,” Seaport Research Partners analyst Dan McKenzie told Yahoo Finance Live on Tuesday following the news.
“I think the airlines have a really good case,” he said, noting both JetBlue and Spirit are not profitable airlines. “The airlines that perform best are the airlines that are the most profitable. …When you’re losing money it’s very hard to provide a competitive product.”
Looking ahead, McKenzie said JetBlue will likely rely on its strong presence in the New York City and Florida markets, but that the airline will ultimately survive.
“JetBlue losses are narrow enough that they can reverse those,” he said. Still, the company is “having to reinvent itself and that’s proven to be a really painful process in the near-term.”
