US Justice Department blocks JetBlue $3.8 billion Spirit deal

The US Department of Justice has moved to block JetBlue’s proposed $3.8 billion acquisition of Spirit Airlines which would establish the fifth-largest carrier in the country.

The lawsuit was filed in Massachusetts federal court and includes the states of New York and Massachusetts as well as Washington, D.C. as plaintiffs.

The lawsuit claims the acquisition would harm consumers by eliminating “about half of all ultra-low-cost airline seats in the industry,” predicting that JetBlue would charge higher prices for Spirit flights if the merger is completed. The Justice Department also argues that the combination would “dampen” competition with other airlines because competing airlines would have fewer incentives to offer low prices in the wake of a merger.

“On dozens of routes serving tens of millions of passengers each year, JetBlue and Spirit are two of the most significant rivals today, and they have such large combined market shares that the transaction is presumptively illegal,” the lawsuit alleges.

The Justice Department said it was prompted to file the lawsuit to “preserve Spirit’s unique and disruptive role in the industry, to protect choice and economical access to air travel, especially for millions of cost-conscious Americans, and to prevent hundreds of millions of dollars in annual harm to consumers.”

Sign In

Lost your password?