US seeks to block JetBlue, Spirit Airlines merger at trial
Send a link to a friend
[October 31, 2023] By
Nate Raymond
BOSTON (Reuters) - The U.S. Department of Justice heads to trial on
Tuesday to urge a federal judge to block JetBlue Airways' planned $3.8
billion acquisition of ultra-low-cost carrier Spirit Airlines.
The case in federal court in Boston is part of a broad effort by
President Joe Biden's administration to preserve competition among the
lowest cost airlines, ensuring air travel remains affordable for many
more US consumers.
The trial will take place without a jury over about three weeks before
U.S. District Judge William Young. At a hearing in March, Young said he
felt an "obligation" to try to rule by year's end.
A merger between JetBlue and Spirit, the sixth and seventh largest U.S.
carriers, respectively, would mark the first major U.S. airline
combination since Alaska Airlines bought Virgin America in 2016.
The sector is dominated by four U.S. carriers - United Airlines,
American Airlines, Delta Air Lines and Southwest - who control 80% of
the domestic market following a series of previous airline mergers, the
Justice Department has said.
![](http://archives.lincolndailynews.com/2023/Oct/31/images/ads/current/atlantabank_lda_PPP_2023.png)
JetBlue has called the deal pro-consumer and has sought to ease U.S.
regulators' antitrust concerns by agreeing to sell off Spirit's gates
and slots at certain airports in New York City, Boston, Newark and Fort
Lauderdale.
But the Justice Department has said those divestitures are not enough,
and in a lawsuit filed in March argued the combined airline would harm
consumers by increasing fares and reducing choice on routes nationwide.
The department is suing alongside Democratic attorneys general from six
states and the District of Columbia. They call Spirit a "disruptive and
innovative airline" whose low-cost, no-frills model has forced price
cuts industry-wide.
[to top of second column] |
![](../images/103123PIX/busine65.jpg)
Airplane model is placed on displayed Spirit Airlines and jetBlue
Airways logos in this illustration taken, June 21, 2022.
REUTERS/Dado Ruvic/Illustrations/File Photo
![](http://archives.lincolndailynews.com/2023/Oct/31/images/ads/current/businessdirectory_dailycover_2023.png)
The Justice Department alleges the merger would eliminate the
pressure larger airlines, including JetBlue, face to lower their
fares in response to competition from Spirit and cost consumers over
$2 billion in higher fares annually.
"The transaction promises to replace Spirit with a higher-cost
airline that offers fewer seats, charges higher fares, and is less
likely to upset other airlines' higher prices," the department said
in a court filing ahead of trial.
The airlines counter that allowing the deal to go forward would
strengthen JetBlue's own long-standing reputation as a market
disruptor.
While JetBlue would become the nation's fifth-largest airline, its
lawyers say it would still only have less than 10% market share
domestically.
JetBlue in a statement said "our combination with Spirit is the best
opportunity to disrupt the industry by increasing competition and
choice, creating a long overdue national low-fare challenger to the
dominant Big Four airlines."
The department's case is part of a broader push by the Biden
administration to aggressively step up antitrust enforcement, an
initiative that has had mixed results in court.
JetBlue was already the focus of one of its earlier cases, with a
different Boston judge, Leo Sorokin, in May siding with the
government in finding that JetBlue's U.S. Northeast partnership with
American Airlines violated antitrust law.
JetBlue subsequently decided to terminate the alliance. American
Airlines is appealing Sorokin's decision.
(Reporting by Nate Raymond in Boston, Editing by Alexia Garamfalvi
and Nick Zieminski)
[© 2023 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |