JetBlue’s Revised and Superior Proposal to Acquire Spirit Airlines May 2, 2022
Important Information for Investors and Stockholders 2 Forward Looking Statements Statements in this presentation contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which represent our management’s beliefs and assumptions concerning future events. These statements are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. When used in this document, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. 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In furtherance of this proposal and subject to future developments, JetBlue (and, if a negotiated transaction is agreed to, Spirit) may file one or more proxy statements or other documents with the SEC. This communication is not a substitute for any proxy statement or other document JetBlue and/or Spirit may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF JETBLUE AND SPIRIT ARE URGED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE POSSIBLE TRANSACTION. Any definitive proxy statement (if and when available) will be mailed to stockholders of Spirit. Investors and security holders of Spirit and JetBlue will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by JetBlue and Spirit through the web site maintained by the SEC at http://www.sec.gov. 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No Offer or Solicitation This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Creating a Compelling National Low-fare Challenger, Benefitting All Stakeholders All-cash offer of $33/share clearly represents a “Superior Proposal” for Spirit shareholders — Enhanced with divestiture commitments and a $200mm reverse break-up fee Pro-competitive combination as “JetBlue Effect” is more effective in lowering legacy fares Accelerates JetBlue’s strategic plan, creating more value for all stakeholders of combined airline Combined airline would fly under the JetBlue brand, bringing its unique combination of lower fare and great experience to more customers Provides combined crewmember base enhanced career opportunities 3
vv Bringing the Airline Customers Love to Fly to More People Source: 2021, 2019 company filings; number of daily flights, and destinations are based on April 2022 schedule data as of 3/25/22. Note: JetBlue and Spirit annual passengers and ASMs as of 2019. JetBlue and Spirit Aircraft, Aircraft in Order Book, and Crewmembers/Team Members as of 2021. 2019 Annual Revenues $ 8.1 billion $ 3.8 billion Annual Customers 43 million 35 million 78 million Aircraft 282 173 455 Aircraft in Order Book 156 156 312 Daily Flights 1,031 733 1,700+ Destinations 98 84 130+ unique destinations Available Seat Miles 54 million 41 million 95 million Crewmembers 22,000 10,000 32,000 4 v $ 11.9 billion
5 JetBlue’s Offer is Clearly Superior to Frontier’s FrontierJetBlue Price $33.00 per share / $3.6bn1 Equity Value $22.42 total consideration2 per Spirit share / $2.5bn Equity Value Consideration All Cash Mostly Stock Value Certainty All cash offer provides greater value certainty Uncertain value given market risk; Offer value has declined by ~$3.40 per share / ~$370mm since announcement Divestiture Commitment (New) Commitment to divest assets up to a Material Adverse Effect on Spirit; carve-out for divestitures that adversely impact the NEA None, despite similar regulatory profile Reverse Break-Up Fee (New) $200mm (~$1.80 / share) (~8% of Spirit share price prior to Frontier announcement and ~45% of Frontier’s original premium) None, despite similar regulatory profile 1 Assumes fully diluted shares outstanding of approximately 109.5 million per Spirit’s Management. 2 Based on exchange ratio of 1.9126x, $2.13 of cash consideration per share, and Frontier closing price as of 29-Apr-2022.. JetBlue’s All-Cash Superior Proposal Offers Greater Value and Closing Certainty + 47%
Facts do not Support Frontier and Spirit Projections; Significantly Overstate Potential Transaction Value 2022 and 2023 EBITDAR estimates excluding synergies are 30% and 18% higher than consensus, respectively Forecasted 2022E-2024E revenue CAGR of 22%1 and doubling in 4 years vs. average airline consensus growth of 12%2 Wage inflation and continued attrition likely to increase cost projections Fuel costs are expected to stay elevated (versus 2019) in 2023 and beyond Pilot shortages are a constraint to growth for the overall industry JetBlue has a realistic view of Spirit and is committed to the strategic rationale of the acquisition 6 Source: Frontier S-4, IBES consensus estimates as of 28-Apr-2022. Note: Charts combine standalone projections. 1 2022E-2024E pro forma Spirit-Frontier Mgmt. revenue CAGR. 2 2022E-2024E average airline IBES consensus revenue CAGR. Airline set includes JetBlue, Spirit, Frontier, American, Delta, United, Southwest, Alaska, Allegiant, and Hawaiian, Frontier and Spirit Projections are Unreasonably Optimistic EBITDAR Excluding Synergies ($bn) Revenue Excluding Synergies ($bn) Projections Do Not Account for Significant Headwinds X X X X % Delta Mgmt. vs. Consensus Mgmt / Consensus CAGRs 22E-24E: 22% / 20% 22E-26E: 19% X $ 0.7 $ 0.4 $ 1.4 $ 1.1 $ 1.8 $ 2.1 $ 2.4 $ 0.6 $ 0.6 $ 1.2 $ 1.1 $ 1.5 $ 1.8 $ 2.2 Mgmt Projections Consensus Mgmt Projections Consensus Mgmt Projections Consensus Mgmt Projections Consensus Mgmt Projections Consensus 2022 2023 2024 2025 2026 Spirit Frontier $ 1.3 $ 1.0 $ 2.6 $ 2.2 2022 2023 30% 18% $ 3.9 $ 4.6 2024 2025 $ 3.3 2026 Mgmt CAGRs 22E-24E: 57% 22E-26E: 36%
JetBlue Has High Conviction Around Achieving Regulatory Approval… … and Greater Commitment to Close than the Frontier Transaction JetBlue has a more significant impact on legacy fares Preliminary economic analysis shows JetBlue’s presence on a nonstop route decreases legacy fares by ~16%, or 3x as much as ultra-low-cost carriers Ultra-low-cost airlines simply cannot compete with the “JetBlue Effect” in the legacy fare decreases they trigger Both transactions create 5th largest U.S. airline operator Combined JetBlue / Spirit would have market share of 9%1 Combined Frontier / Spirit would have market share of 8%1 JetBlue has less overlap with Spirit than Frontier has JetBlue overlaps with Spirit on 48 nonstop routes2 Frontier overlaps with Spirit on 76 nonstop routes2 ✓ JetBlue has less overlap in flights, seats, and ASMs with Spirit than Frontier in the metropolitan areas served by both3 JetBlue offers a strong regulatory commitment and a reverse break-up fee JetBlue’s proposal includes a commitment to divest assets up to a Material Adverse Effect on Spirit and a $200mm reverse break-up fee Frontier offers no divestiture commitment, despite similar regulatory profile, and could walk away from the merger without any penalty FrontierJetBlue 1 Based on departure seats for full year 2022. 2 Based on Q1-Q3 2021 DOT data. 3 Based on scheduled flights / seats / ASMs for 2021 7
8 JetBlue’s brand is superior to Frontier’s because of its enhanced customer service, fair compensation for its Crewmembers, and differentiated business model “JetBlue Effect” has the strongest impact on legacy fares of any other airline on the nonstop routes it flies Customers should not have to choose between price and quality service. JetBlue’s customer service has won the company hundreds of awards since its inception – including the “Travelers’ Choice Award” multiple times Air Line Pilots Association reported that Frontier pilots were the lowest-paid narrow body pilots in America – often 40%1 under peers; in contrast, JetBlue offers Crewmember compensation in- line with industry standards and provides top notch benefits Women and people of color comprise 46% and 59% of JetBlue Crewmembers, respectively, and the combined airline will carry this ethos forward on a much larger scale 81 Air Line Pilots Association, "Profits over Pilots at Frontier Airlines.” JetBlue is a Better Home for Spirit’s Customers, Team Members, and for the Community at Large
Strong Strategic Rationale Creates a Compelling National Low-fare Challenger Accelerates Existing Growth Plan while Complementing Northeast Alliance (NEA) Strategy Significantly Enhances JetBlue’s Long-term Financial Returns 9 Creating Long-Term Value for all JetBlue Stakeholders