JetBlue-Spirit Merger Blocked: 7 Key Quotes From Judge's Ruling

17.01.2024 - 05:39 / skift.com / Spirit Airlines / U.S.Airlines / William Young / Meghna Maharishi / Justice Department

A federal judge on Tuesday blocked the proposed $3.8 billion merger between JetBlue and Spirit Airlines, the first major U.S. airline merger to be rejected in 20 years. 

The merger would have created the fifth-largest U.S. airline and JetBlue planned to convert Spirit’s fleet to fit its interior style, meaning the combined airline would have fewer seats on board. 

During the trial, the Justice Department argued that those fewer seats would lead to higher airfares, and the loss of Spirit as the country’s largest ultra-low-cost carrier would harm price-sensitive consumers. 

JetBlue, on the other hand, said it needed the merger to remain competitive against the “Big Four” airlines — American, Delta, United and Southwest — which make up around 80% of the U.S. market. 

By the end of the month-long trial, Massachusetts District Court Judge William Young took the Justice Department’s side. 

In the 109-page ruling, Young delivered some notable lines — here are seven of them that sum up the decision to block the JetBlue-Spirit merger:

This is perhaps the most notable and impassioned line in Young’s ruling. JetBlue repeatedly argued during the trial that other ultra-low-cost carriers like Allegiant, Avelo, Breeze and Frontier could fill in the void if Spirit were to no longer exist. 

But the Justice Department said those ULCCs would not be able to fill in for Spirit due to the different business models. Carriers like Allegiant and Avelo typically fly routes from cities where there is either limited or no commercial air service to popular leisure destinations. Spirit, on the other hand, flies from major cities and directly competes with the legacy U.S. airlines. 

Young touches on how during the first two decades of the 21st century, the U.S. government approved mergers between American-US Airways (2013), Southwest-AirTran (2013), United-Continental (2010) and Delta-Northwest (2008), creating a heavily consolidated industry. 

JetBlue had argued that organic growth was limited and a merger with Spirit was the best way to efficiently compete with the Big Four airlines. 

JetBlue, when it first entered the U.S. market in 2000, was seen as a disruptive force to the airline industry because of its low fares and perks like extra legroom and live television. In recent years, JetBlue has sought to position itself as a competitor against the Big Four carriers through partnerships like the Northeast Alliance – which was also blocked – and its expansion into Europe. 

When refuting arguments that fewer seats would mean higher airfares, JetBlue said it would offset the reduced capacity of a combined airline by offering more flights per day, reducing seasonal changes in flight schedules and operating more red-eye flights. 

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