On Tuesday, a federal judge ruled against JetBlue Airways’ purchase of Spirit Airlines. The decision comes after the Justice Department sued to stop the merger, saying the acquisition would limit industry competition and put pressure on airfares.
JetBlue offered $3.8 billion to buy Spirit in an attempt to help the carrier grow and compete against larger rivals like Delta and United, CNBC News reported.
“JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers,” U.S. District Court Judge William Young wrote in his decision. “The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
Judge Young’s ruling is a win for the Biden Administration and Justice Department, which fights aggressively to block deals it views as anti-competitive.
“Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward,” Attorney General Merrick Garland said in a statement. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers.”
The DOJ filed a lawsuit in March that alleged JetBlue’s acquisition of the budget airline Spirit would cause many passengers to pay higher fares by getting rid of Spirit and “about half of all ultra-low-cost airline seats in the industry.”
“Spirit is a small airline. But there are those who love it,” Young, who was appointed by former President Ronald Reagan, wrote in his ruling. “To those dedicated customers of Spirit, this one’s for you.”
JetBlue and Spirit released a joint statement saying that they disagreed with the ruling and were strategizing over the next steps.
“We continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers,” the carriers said.
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