JetBlue Airways has agreed to buy Spirit Airlines in a $3.8 billion deal that would create the nation’s fifth-largest airline and take the fast-growing budget carrier out of business.

The deal, announced Thursday morning, ends a months-long bidding war for Spirit and comes hours after Spirit abandoned plans to merge with fellow low-cost carrier Frontier Airlines. Spirit has lost shareholder support to get approval for the Frontier merger, which was first announced in February.

If approved by regulators, JetBlue’s takeover of Spirit would leave Frontier as the largest discount carrier in the U.S. It would be the first major U.S. airline deal since Alaska Airlines beat out JetBlue for Virgin America in 2016. Analysts say the deal could open the door to further consolidation among smaller carriers.

JetBlue executives say buying Spirit will give it access to more Airbus Jets planes and pilots, fast-track its growth and help it compete with larger carriers like American, Delta, United and Southwest, which dominate most of the U.S. market. The New York-based carrier plans to refresh Spirit’s yellow planes with JetBlue-style smaller interiors, screen seats and more legroom.

JetBlue said it will pay $33.50 in cash for Spirit, including $2.50 per share if Spirit shareholders approve the deal and a payment of 10 cents a month starting next year until the deal closes.

The deal is expected to close in the first half of 2024, JetBlue and Spirit said in a filing. They expect to be able to fly with the same operating certificate, preferably on the same airline, by the first half of 2025, the spokesman said.

“We have two priorities, one is to close this deal and get the airline integrated and build a bigger JetBlue,” JetBlue CEO Robin Hayes said in an interview Thursday. “To perform a safe operation the second time.”

JetBlue will lead Hayes’ combined airline, which has said it will remain headquartered in New York City.

“We have a long-term commitment to New York…and we’re here to stay,” Hayes said. Both airlines have significant operations at some of Florida’s busiest airports, including Spirit’s home base in Fort Lauderdale and the Orlando tourism hub.

JetBlue’s surprise, all-cash bid for Spirit in April threw it into disarray with plans to merge with Frontier. Frontier and JetBlue continued to compete for Spirit, each sweetening its offers. Earlier this month, Frontier’s CEO expressed frustration at the lack of shareholder support for the proposed merger, but called the offer “best and final.”

“Instead of overpaying for Spirit, the board prioritized the interests of Frontier, our employees and our shareholders,” Frontier CEO Barry Biffle said on an earnings call late Wednesday.

Frontier shares rose more than 20% to $13.58 on Thursday. Spirit rose 5.6% to $25.66, and JetBlue lost 0.4% to end Thursday at $8.37.

“If the JetBlue-Spirit merger goes through, we believe Frontier will inherit the key to the low-cost kingdom in the US,” JP Morgan airline analyst Jamie Baker wrote in a note Thursday.

Miramar, Florida-based Spirit has repeatedly rejected JetBlue’s bids and said the tie-up could not be approved by regulators. Spiel said the deal would raise prices and give American more control over JetBlue.

Asked what changed his stance on the JetBlue deal, Spirit CEO Ted Christie said: “That merger deal. [with Frontier] It has now been discontinued so this is a significant change and will lead to where we are today.”

Spirit must pay Frontier $25 million in merger-related expenses as a result of the terminated deal, according to Frontier.

A wave of airline consolidation since the mid-2000s has seen four US airlines control nearly three-quarters of the domestic air travel market. President Joe Biden’s Justice Department has vowed to crack down on deals it says are anti-competitive.

The Justice Department did not immediately comment on the JetBlue-Spirit settlement on Thursday. American declined to comment on the deal.