Federal judge blocks $3.8B merger of Spirit, JetBlue

A federal judge on Tuesday blocked JetBlue Airways' proposed $3.8 billion takeover of Spirit Airlines, saying it would reduce competition and harm consumers.

U.S. District Judge William Young said in a court filing Tuesday that the acquisition, which would make JetBlue the fifth-largest airline, “complies with the Clayton Act, which is designed to prevent anticompetitive harm to consumers.” “This would significantly reduce competition,” he said. ”

Young said that while the merger may make JetBlue more competitive against the nation's largest airlines, as the airlines have argued, JetBlue's toughest competition, the nation's largest low-cost carrier, He pointed out that certain spirits would also be eliminated. That would push up prices, particularly hurting Spirit's cost-conscious customers, he said.

“If JetBlue is allowed to acquire Spirit – at least as proposed – it would eliminate one of the few major competitors in the airline industry that offers unique innovation and price discipline. ” Young wrote.

“The immediate doubling of the size of JetBlue's stakeholders in the industry will further strengthen the oligopoly. Worse, this merger will further abandon JetBlue's roots as a maverick low-cost airline.” “That's going to happen,” Young added.

The ruling was a major victory for the Justice Department, which had filed a lawsuit seeking to stop the merger from proceeding.

Attorney General Merrick Garland said: Announced in March 2023 “If allowed to proceed, this merger would limit options and increase ticket prices for passengers nationwide” and “eliminate Spirit's unique and disruptive role in the industry,” the Associated Press said. The Associated Press reported that he has filed a lawsuit.