A federal judge has blocked an impending $3.8 billion merger between JetBlue and Spirit Airlines.
The Biden administration has fought to prevent the airline merger, arguing in a lawsuit that it would trigger national price hikes. Spirit is the country’s largest budget airline.
U.S. District Judge William Young of the District Court of Massachusetts wrote on Jan. 16 that the merger would “substantially lessen competition” and was in violation of anti-trust law, per AP News. Young presided over the 17-day trial last year which began on Oct. 31.
Spirit shareholders voted in October of 2022 to move forward with the sale to JetBlue. The airline had previously intended to merge with Frontier Airlines.
“This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant U.S. carriers,” Spirit CEO Ted Christie said in a press release at the time. “We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to Team Members, Guests and stockholders."
Young’s ruling is a blow to the airline and JetBlue, which is in the middle of an internal leadership shift.
JetBlue’s CEO Robin Hayes announced on Jan. 8 that he was stepping down. He was an advocate for the merger and Peter Boneparth, the chairman of the company’s board, commended him for his “willingness to continue to extend his tenure through the unprecedented challenges of the COVID crisis, and then again as we pursued our plan for the transformational Spirit acquisition.”
Hayes will be replaced on Feb. 12 by Jonna Geraghty, the airline’s current president and chief operating officer.
“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," JetBlue said in a statement following the judge’s ruling, per Time.
The Department of Justice saw the ruling as a victory for consumers.
“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,” said Attorney General Merrick Garland in a press release. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers. I want to thank the Antitrust Division for their excellent work on this case.”
“We are particularly encouraged by the court’s acknowledgement of the role of the Justice Department in protecting consumers ‘who otherwise would have no voice’ and the ‘forthrightness, civility, and zealous advocacy’ that ‘assisted the Court in reaching out for justice,’” said Principal Deputy Assistant Attorney General Doha Mekki of the DOJ’s Antitrust Division. “I am incredibly proud of the Antitrust Division’s staff and our state law enforcement partners whose tireless work ensured another airline merger would not harm American travelers.”
