A federal judge has blocked JetBlue Airways’ $3.8 billion acquisition of Spirit Airlines after the Justice Department’s antitrust charge.
US District Court Judge William Youn ruled: “JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers.
“The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
“The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers”
The decision represents a win for the DOJ’s efforts to deter what it deems anti-competitive transactions.
Attorney General Merrick Garland said: “Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward.
“The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers.”
In its March lawsuit, the DOJ argued that JetBlue’s purchase of Spirit would result in higher passenger fares by removing about half of all ultra-low-cost airline seats.
Spirit, known for its no-frills model with affordable fares and additional fees, has rapidly expanded its market presence in recent years.
The carriers said in a joint statement: “We continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers.”
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JetBlue, which faced previous antitrust opposition to its regional alliance with American Airlines, has been striving to secure the Spirit deal against obstacles.
The termination of the Northeast Alliance and commitment to divestitures were cited as measures to address antitrust concerns, but the judge’s decision puts the deal in question.
The ruling leaves JetBlue with strategic challenges and tasks, and incoming CEO Joanna Geraghty is tasked with charting a new course.
The airline argued that access to Spirit’s Airbus planes would facilitate rapid growth amid a shortage of planes and pilots, enhancing its competitiveness against larger carriers.
