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CNBC Exclusive: CNBC Transcript: Spirit Airlines CEO Ted Christie Speaks with CNBC’s Phil LeBeau on “Power Lunch” Today

WHEN: Today, Monday, May 16, 2022

WHERE: CNBC's "Power Lunch"

Following is the unofficial transcript of a CNBC exclusive interview with Spirit Airlines CEO Ted Christie on CNBC's "Power Lunch" (M-F, 2PM-3PM ET) today, Monday, May 16th. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2022/05/16/were-a-little-surprised-and-frustrated-by-robin-hayes-comments-says-spirit-airlines-ceo.html.

All references must be sourced to CNBC.

PHIL LEBEAU: Ted, thanks for joining us today from the Spirit headquarters in Miramar, Florida. I know you can't go into details about the tender offer of $30 a share, you still need to go over it with the rest of the board from Spirit, but what's your reaction to JetBlue coming back and making yet another bid to buy Spirit?

TED CHRISTIE: Well, thanks for having me on Phil. Appreciate it. Yeah, you're right. We can't comment on the tender offer until our board has had time to review it, but I think what we can talk about is the prior proposal that we received for them at $33 a share and why our board determined that it was not a superior proposal to our current merger agreement with Frontier and it really circles around the primary issue of whether or not that transaction could be consummated. And we invested extensive time with JetBlue and their regulatory advisors along with our regulatory advisors and financial advisors reviewing the strategy and looking at what, ways that it might possibly get done. And what we've determined is that it's not likely to be approved and it really boils down to a couple of things. First and foremost, JetBlue is in active litigation with the Department of Justice today on the Northeast Alliance with American Airlines and we view that as a very critical issue as it relates to trying to solicit additional regulatory approval and in addition to that, it's problematic because it is a higher fare higher cost airline buying one of the largest ULCCs in the Americas. And so for those reasons and our board did put a tremendous amount of effort into this they determined that it was not likely to be consummated and therefore not superior.

LEBEAU: Okay, Ted, there's a disconnect here because when I talked to Robin Hayes, he says you guys didn't do your due diligence and exact quote from him is, "We've been disappointed by their lack of engagement," meaning your lack of engagement. "We don't think the Spirit board did its fiduciary duty considering our offers. They have hidden behind the regulatory approval argument as a smokescreen." Basically Ted, he says you guys didn't do your job. You didn't really consider their offers. What do you say to that?

CHRISTIE: Well, I think that's a bit frustrating that they're putting misinformation in the market because the truth is, is farther from that. We engaged with JetBlue early on in their process and spent the better part of a month in back and forths with them numerous conversations between us and them and their regulatory advisors. In addition to diligence, we opened up our data room to them. We had an extensive call with them. I participated in a digit, diligence call with myself and my CFO, with Robin and their CFO and they asked us all the questions they wanted to ask us about the business and in fact, at the end, complimented us on being transparent and productive. So we felt that that whole process, quite frankly, was very constructive. So we're a little surprised and frustrated that they're spreading that misinformation. Our board invested considerable time and effort in reviewing their proposal and determined it was not superior.

LEBEAU: Ted, you know, their commentary on Wall Street. There are a lot of people who think forget about JetBlue, the merger between Spirit and Frontier doesn't have much of a chance of getting approved through with this administration. Do you honestly think that you can can do a combination and it will get DOJ approval?

CHRISTIE: I do honestly think that Phil. In fact, it's one of the reasons that we're excited about that transaction is this is a different type of deal. The reason that we view the Jet Blue deal as problematic is is the antithesis to the way we look at the Frontier deal. These are two like-minded low-cost businesses that are looking to expand and drive more stimulation with lower fares. This is not a discussion about capacity constraint and higher fares, which is what we're hearing out of the JetBlue camp. And we do that is very problematic from a regulatory perspective. Whereas with our Frontier transaction, it's about growth. It's about more low fares. We think it's going to be very good for for our shareholders because it's going to have tremendous synergies as we extract additional utilization and, and flying out of the combined business. It's great for team members. We're going to create 10,000 plus jobs over the next five years and good for consumers, you know, over a billion dollars in savings that we think we can deliver.

LEBEAU: Hey Ted, JetBlue has already started reaching out to your largest investors and I'm assuming that you have done the same or you've at least kept them apprised of your thought process as you've gone through this entire process. How active will you have to be over the next several weeks as it's clear JetBlue is going to come in saying these guys haven't done their work. We're a better company to merge with than Frontier.

CHRISTIE: Well, we're going to do exactly what we plan to do which is we have an exciting transaction to put forward to our shareholders. The vote is scheduled for June 10th. We're going to be reaching out to them and making sure they have all the information they need to make a good, informed decision which we're supportive of this transaction, management and the board recommend this transaction to to our shareholders so we stand by that decision. We think we'll be able to show them all the information they need. Obviously, we've been active already but that will continue here over the next month as we get closer and closer to to the vote date. But we were planning on doing that anyway and so we're we're looking forward to getting that done.

LEBEAU: Ted, thank you for joining us today. I know there are a lot of people who wanted to hear from you, a lot of your own investors who wanted to hear from you and I appreciate that we've had a chance to hear from you Ted Christie, the CEO of Spirit Airlines.