U.S. Sues to Block JetBlue and Spirit Merger

25.08.2023 - 14:00 / skift.com / Spirit Airlines / Robin Hayes / Merrick Garland / United Airlines / Edward Russell / Spirit Merger / Sara Nelson

The U.S. Department of Justice on Tuesday filed a suit to block the proposed $3.8 billion merger of JetBlue Airways and Spirit Airlines citing competition concerns.

The antitrust regulator claimed that the merger would negatively impact consumers by raising airfares by on average 30 percent, particularly in markets where both JetBlue and Spirit are large. That impact would be felt by at least the 30 million passengers that Spirit carried last year, plus everyone that pays less, thanks to the competitive effect of the discounter’s bargain no-frills fares, the DOJ argued. Massachusetts, New York, and the District of Columbia joined the DOJ in the suit filed in the U.S. District Court for the District of Massachusetts.

“The merger of JetBlue and Spirit would result in higher fares and fewer choices for tens of millions of travelers across the country,” U.S. Attorney General Merrick Garland said Tuesday. The merger would violate the Clayton Act that governs antitrust in the U.S.

The U.S. Department of Transportation said Tuesday that it backs the DOJ’s position, and will deny JetBlue and Spirit’s application for an exemption to close their merger.

JetBlue and Spirit have repeatedly rebutted such claims arguing that, by merging, the airlines would create a stronger competitor to the Big Four airlines — American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines. This would allow them to provide more service to more destinations, including potential flights to Hawaii.

“We believe the DOJ has got it wrong on the law here and misses the point that this merger will create a national low-fare, high-quality competitor,” JetBlue CEO Robin Hayes said in a statement Tuesday. He has previously said the airline would take the DOJ to court if it moved to block the merger.

The deal is not without its supporters. Florida’s Attorney General Ashley Moody on Monday unveiled an agreement with the airlines to support the merger in exchange for commitments to grow and protect jobs in Florida. Under the accord, JetBlue and Spirit would increase the number of seats they fly in both Fort Lauderdale and Orlando — bases for each airline — by 50 percent from current levels, as well as the aggregate number of seats they fly at all other Florida destinations by 50 percent.

“Blocking this merger in an attempt to undo the consolidation in the airline industry is backward thinking,” Association of Flight Attendants-CWA President Sara Nelson said Tuesday. “It will do nothing to change today’s industry dynamics, but it will ensure things stay the same.”

The AFA, which represents flight attendants at Spirit, backs the merger.

The merger of JetBlue and Spirit would create the fifth largest U.S. domestic airline after the