Business|Justice Department Sues to Block JetBlue’s Acquisition of Spirit
Antitrust regulators said the woody would trim contention and rise fares. The companies assertion it would let them to amended vie against the biggest U.S. airlines.
March 7, 2023, 10:55 a.m. ET
The Justice Department connected Tuesday filed a suit seeking to halt JetBlue Airways from buying Spirit Airlines, arguing that the $3.8 cardinal woody would trim contention successful a highly concentrated industry.
In the suit, the Justice Department said that by absorbing Spirit, JetBlue would destruct a disruptive force that has kept fares debased crossed the country. The merger would besides springiness JetBlue an outsized clasp connected dozens of routes, the department’s antitrust part said.
The suit is the latest illustration of the department’s assertive attack to enforcing antitrust instrumentality nether President Biden, suing to forestall mergers and challenging practices it considers anti-competitive crossed a assortment of industries. The suit volition enactment JetBlue’s plans connected clasp for astatine slightest a fewer months and perchance overmuch longer. The institution said connected Monday that it expected a suit and planned to support its woody successful court.
If the companies prevail, the operation would beryllium the archetypal large U.S. hose merger successful years. It would assistance JetBlue rapidly execute a long-sought expansion, leapfrogging Alaska Airlines to go the nation’s fifth-largest carrier.
But adjacent if the hose does get Spirit, JetBlue would inactive clasp lone astir 10 percent of the U.S. aerial question market. United Airlines, which is the fourth-largest carrier, has a 15 percent marketplace share. American Airlines, Delta Air Lines and Southwest Airlines each person much than 17 percent of the business. A bid of ample deals implicit the past mates of decades has greatly accrued the powerfulness of the large 4 airlines, which person acquired companies similar AirTran, TWA, Northwest, Continental and US Airways.
JetBlue has argued that consumers basal to payment from the acquisition. The institution has a estimation of challenging overmuch larger carriers from airports successful New York and Boston. A larger JetBlue, the institution contends, would beryllium capable to vie adjacent much vigorously, forcing the 4 ascendant carriers to little fares connected much routes.
But the Justice Department said that portion JetBlue offers affordable summons prices, Spirit offers adjacent cheaper fares, making it a bigger menace to ample airlines astatine the airports it serves. JetBlue has besides said that it plans to region seats from Spirit’s densely packed planes to lucifer its ain configuration, which antitrust officials said would marque it hard to support costs and fares arsenic debased arsenic Spirit has.
The 2 airlines person dozens of overlapping routes and JetBlue’s committedness to springiness up Spirit’s holdings successful New York, Boston and Fort Lauderdale, Fla., isn’t capable to code concerns astir competition, the Justice Department said.
JetBlue, which had to outbid Frontier Airlines to unafraid a woody with Spirit, has said that it expects to adjacent the acquisition successful the archetypal fractional of adjacent year.