Throughout 2023, the aviation world was following the JetBlue-Spirit case very closely.

While the New York-based airline’s  (JBLU) – Get Free Report plans to acquire Spirit  (SAVE) – Get Free Report for $3.6 billion would have made it the largest industry move since the pandemic, a federal judge agreed with the Department of Justice’s argument that such a deal would create an anticompetitive environment and blocked the proposed merger on Jan. 16.

Related: I just flew Spirit for the first time ever — here’s what it was like

“Spirit is a small airline but there are those who love it,” U.S. District Judge William Young wrote in his ruling. “To those dedicated customers of Spirit, this one’s for you.”

Spirit stock falls in premarket trading, continues to tank

The news broke close to the end of trading on Tuesday afternoon (Jan. 16) and Spirit shares immediately fell by more than 47% to $5.86. They opened at $7.92 on the morning of Jan. 17 while JetBlue stock rose by 5% and started the day at $5.13.

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With the low-cost airline struggling to turn a profit even amid the boost in travel demand post-pandemic, Spirit stock has also fallen by more than 56% in the last six months. According to the third-quarter results the airline released last October, the airline suffered a $157.6 million or $1.44 per diluted share net loss despite revenue of $1.2 billion.

JetBlue, meanwhile, reported $2.4 billion in revenue and a net loss of $129 million in the third quarter but has had more success in past quarters while Spirit’s business model of attracting customers with a very low base fare and then making up for the difference with additional fees has proven increasingly unpopular.

“We believe this is a positive for JetBlue as business at Spirit turned negative between the time the merger was announced to now,” Helane Becker, an analyst at TD Cowen, wrote in a note to investors first reported by Reuters.

Becker further said that the best course of action for Spirit would be a Chapter 11 bankruptcy and a liquidation sale given its longstanding financial troubles.

JetBlue and Spirit to ‘evaluate next steps’ (here’s what that means for you)

J.P. Morgan Equity Analyst Jamie Baker also put out a note telling investors that they “see little valuation support for Spirit in the absence of a merger.”

In a joint statement to press, JetBlue and Spirit said that they disagreed with the ruling and “continue to believe that our combination is the best opportunity to increase much needed competition and choice” while also saying that they would be “reviewing the court’s decision” and “evaluating next steps.”

While JetBlue is now back at the drawing board for how to proceed with stated plans on growing into one of the country’s largest airlines, the market still reacted positively to the news of the merger block as its shares continue to be up even as public opinion on whether one should continue to put one’s faith and money in the airline are divided.

“JetBlue shares are up because, arguably, the last thing an airline needs heading into a recession is more capacity and a complex integration,” writes Lou Whiteman of The Motley Fool. “For Spirit, the deal leaves the company vulnerable at an inopportune time.”