Jetblue said Friday it may back out of its merger with Spirit Airlines, after a federal judge blocked the $3.8 billion deal last week.
17.01.2024 - 05:39 / skift.com / Spirit Airlines / John F.Kennedy / William Young / Meghna Maharishi
A U.S. District Court judge on Tuesday blocked the proposed $3.8 billion merger between JetBlue and Spirit Airlines.
Massachusetts District Court Judge William Young wrote the merger would lead to less competition in the airline industry, since Spirit is the largest ultra-low-cost carrier. Young called Spirit “a uniquely disruptive competitor” for its ability to drive down airfares whenever it enters the market.
“Spirit is a small airline. But there are people who love it,” Young wrote. “To those dedicated customers of Spirit, this one’s for you. Why? Because the Clayton Act, a 109-year-old statute requires this result — a statute that continues to deliver for the American people.”
The ruling marks a major victory for the Biden administration, which has taken a hawkish attitude toward mergers. However, it also signifies a sharp turn away from precedent, where the government previously approved mergers between American-US Airways (2013), Southwest-AirTran (2013), United-Continental (2010) and Delta-Northwest (2008).
This is the first time in 20 years that the federal government has rejected an airline merger.
The series of mergers the government approved in the past two decades led to the creation of the “Big Four” airlines — American, Delta, United and Southwest — which control around 80% of the U.S. market.
JetBlue and Spirit said they disagreed with the ruling and were evaluating next steps.
“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,” the two carriers said in a statement.
Spirit’s shares tumbled by 50% following the ruling.
If the merger had been approved, it would have created the fifth-largest airline in the U.S. JetBlue would have fully absorbed Spirit’s operations and network, planning to retrofit Spirit’s fleet of Airbus A320s and A320neos to fit its style of interiors, meaning that there would be fewer seats on board.
The Justice Department had argued during the trial that fewer seats meant fares would rise across the board, and that the loss of Spirit as the largest U.S. ULCC would harm the most price-sensitive consumers.
JetBlue argued it needed to merge with Spirit to effectively compete against the Big Four carriers, since the industry was already so consolidated.
Young agreed with the Justice Department’s assessment, saying the “elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
The ruling is another loss for JetBlue.
It previously had sought to expand its presence at New York’s John F. Kennedy International Airport and
Jetblue said Friday it may back out of its merger with Spirit Airlines, after a federal judge blocked the $3.8 billion deal last week.
JetBlue on Friday said for the first time that its agreement to purchase Spirit Airlines for $3.8 billion may collapse, signaling that the New York-based airline may be looking to pull out of the deal.
Spirit Airlines is expanding its presence in South Carolina, adding flights from Charleston to Boston and New York City this spring.
JetBlue Airways said on Friday that it might back out of a $3.8 billion acquisition of Spirit Airlines after a federal judge blocked the deal.
The Wall Street Journal published its annual list of the best and worst carriers in the US for 2023, and Delta Air Lines once again took the crown for the top airline.
On January 16, a federal court judge ruled to block JetBlue Airways’ proposed $3.8 billion purchase of Spirit Airlines on antitrust grounds. The decision was made based on a U.S. Justice Department lawsuit filed in March 2023 and aimed at stopping the deal. According to the suit, the merger would “allow JetBlue to eliminate its largest ultra-low-cost rival, further concentrate the airline industry, and harm American travelers.”
JetBlue will discontinue service from Baltimore this spring after more than a decade of flying.
JetBlue Airways and Spirit Airlines announced plans to appeal the decision by a United States federal judge to block a potential merger between the two carriers based on violations of antitrust laws.
More than three generations ago, back when the Los Angeles Dodgers were still the Brooklyn Dodgers, they used to have trouble getting past the New York Yankees in the World Series after running roughshod in the National League.
JetBlue and Spirit said Friday they are planning to appeal a judge’s ruling that blocked their proposed merger.
JetBlue said Friday it is cutting several routes from its network as part of its effort to return to profitability.
JetBlue and Spirit said Friday that they will appeal a judge's decision that would block them from completing their blockbuster merger.