The Proposed Merger with Spirit Airlines, Inc. ("Spirit")

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]

The Proposed Merger with Spirit Airlines, Inc. (“Spirit”)

The Proposed Merger with Spirit Airlines, Inc. (“Spirit”)

On February 5, 2022, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Top Gun Acquisition Corp. (“Merger Sub”), a direct wholly-owned subsidiary of the Company, and Spirit. The Merger Agreement provided that, among other things, the Merger Sub would be merged with and into Spirit (the “Merger”), with Spirit surviving the Merger and continuing as a wholly-owned subsidiary of the Company. On July 27, 2022, the Company and Spirit mutually terminated the Merger Agreement.

During the year ended December 31, 2023, the Company recorded $1 million in expenses related to the proposed Merger within transaction and merger-related costs, net in the Company’s consolidated statement of operations, which included merger-related retention bonus expense for all eligible employees who were subject to CARES Act compensation restrictions. During the year ended December 31, 2022, the Company recorded $10 million in net expenses related to the proposed Merger within transaction and merger-related costs, net in the Company’s consolidated statement of operations. These costs included $19 million in retention bonus expense and $16 million in transaction costs, which were made up of banking, legal and accounting fees, among others, offset by $25 million received from Spirit for reimbursement of incurred Merger-related expenses in accordance with the termination provisions set forth in the Merger Agreement.

The Merger Agreement provides that in the event that Spirit, within twelve months following the termination of the Merger Agreement, consummates an acquisition with another acquiror or enters into a definitive written agreement providing for an acquisition with another acquiror, which is ultimately consummated, the Company will be owed an additional $69 million. Although Spirit entered into a definitive written agreement providing for an acquisition with another acquiror within this twelve-month period ending July 27, 2023, the acquisition has not been consummated and therefore no amounts have been recognized on the consolidated balance sheets and in the statements of operations for the year ended December 31, 2023 and 2022.