JetBlue Airways and Spirit Airlines have called off their $3.8 billion merger following a federal judge's ruling against it.

The judge's decision, siding with the Justice Department, was based on concerns that the merger would harm consumers by disrupting Spirit's low-cost fare offerings.

With the merger's cancellation, JetBlue's new CEO, Joanna Geraghty, acknowledged that the companies would not be able to satisfy the terms of their agreement by the July 24 deadline.

As a result of the termination, JetBlue is set to pay Spirit a $69 million breakup fee.

The failed merger has affected stock prices, causing a 16% drop for Spirit's shares, while JetBlue's saw a slight increase.

The outcome also casts uncertainty on other airline industry deals, specifically mentioning the potential acquisition of Hawaiian Airlines by Alaska Airlines.