Deal Blocked: Jet Blue Can’t Buy Spirit

(IntegrityTimes.com) – On Tuesday January 16 Judge William G. Young of the U.S. District Court for the District of Massachusetts blocked JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines. The Justice Department supported the block as they said that smaller, low-cost airlines like Spirit help reduce fares and help out lower income travelers, while JetBlue charges higher prices than Spirit which could hurt consumers. Some are concerned that without the merger Spirit will go out of business taking their lower cost services out of the market entirely.

Judge Young wrote that his decision was to protect the core principle of antitrust law, which he says is to protect the U.S. market and its participants from “anticompetitive harms”. Transportation Secretary Pete Buttigieg commented on social media platform X that the decision was a good one that will support a competitive market and support consumer choice. Attorney General Merrick Garland also praised the decision claiming it as a victory for tens of millions of travelers who will not have to settle for fewer options. President Joe Biden also expressed support for the decision.

Not everyone is happy with the ruling, however. Spirit and Jet Blue issued a joint statement which stated they are considering appealing the decision. They claim the merger would increase customer choices rather than lessen them. Helane Becker an airline analyst with the Cowen Group, an American multinational investment bank and financial services division of TD Securities, believes that without the merger Spirit may be forced into bankruptcy. She added that if they are not able to find another buyer, they may have to liquidate which would effectively remove them from the market anyway.

Antitrust laws are vital to a free market though, and mergers and consolidations can create monopolies where few or just one business controls an industry to such a degree that they stifle competition and innovation. The merger between JetBlue and Spirit would have made their new joint business the nation’s fifth-largest airline. Two-thirds of the market are already effectively dominated by Delta Air Lines, American Airlines, United Airlines and Southwest Airlines. Alaska Airlines recently announced plans to purchase Hawaiian Airlines for $1.9 billion which would give them a greater share of the market as well, if it is approved.

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