March 8, 2023: On Tuesday, the Justice Department has filed a suit to block JetBlue Airways’ $3.8 billion offered takeover of budget carrier Spirit Airlines, the Biden administration’s recent attempt to prevent industry consolidation.
Spirit Airlines agrees to sell itself to JetBlue in the previous summer after a long battle for the carrier amid JetBlue and Frontier Airlines.
New York-based JetBlue’s purchase of Spirit experiences a high hurdle with regulators, and the airline said it expected DOJ action this week.
JetBlue’s takeover of Spirit would create the fifth-largcountry’s fifth-largest airline and Florida-based Spirit, with its firm’s model of rock-bottom prices and fees for everything from carry-on luggage to seat positions.
“JetBlue’s plan would be greater the unique competition that Spirit provides and regarding half of all ultra-low-cost airline positions in the industry and leave tens of millions of travellers to face higher fares and fewer options,” the Justice Department stated in its complaint, pointed in a Massachusetts court.
“Spirit itself put it simply, ‘A JetBlue acquisition of Spirit will have lasting negative effects on consumers.’
JetBlue is arguing the combination would permit it to better compete with vast airlines that dominate the U.S. market. The agreement would also give JetBlue allowance to more Airbus jetliners and pilots in short supply as travel demand remains strong.
JetBlue plans to remodel Spirit’s bright-yellow planes with packed-in seats to JetBlue’s, including seat-back screens and more legroom.
“JetBlue is competing hard against Spirit and views it as a serious competitive threat. But therefore of continuing that competition, JetBlue now proposes an acquisition that Spirit describes as a high-cost, high-fare airline purchasing a low-cost, low-fare airline,” the DOJ stated.
New York, Massachusetts and Washington, D.C., joined the suit.
A JetBlue-Spirit combination would be the initial major U.S. airline merger since Alaska Airlines’ takeover of Virgin America in 2016. The Justice Department at the time is requiring Alaska to scale back its code share with American Airlines to clear the deal.
The Justice Department sued to block American Airlines’ 2013 merger with U.S. Airways. Still, it settled, forcing America to sell dozens of gates and slots at congested airports such as Washington Reagan National Airport.
The Biden administration vowed a hard line against deals it considers anti-competitive. It has sued to block other mergers, like Penguin Random House’s failed attempt purchasing rival publisher Simon & Schuster. Yet the administration has yet to stop several deals, such as one previous year in the sugar industry and UnitedHealth’s merger with Change Healthcare.
After many travel disruptions over the past two years, the administration has also aimed at the airline industry, even after carriers received $54 billion in payroll aid to weather the Covid pandemic.
JetBlue is awaiting a law on its Northeast partnership with American Airlines, which the Justice Department sued to undo in 2021.
We provide the insights on leaders who are responsible for taking their organization to new heights, all the while bringing together a group of talented individuals.
BYD Company Limited, a renowned innovator in electric vehicles and sustainable technology, has announced a transformative …
Hertz Global Holdings Inc. (NASDAQ: HTZ), a prominent car rental company, has disclosed further financial losses associated …
AspenTech, a Massachusetts-based company, plays a pivotal role in the oil and gas industry by leveraging cutting-edge technologies, including AI (artificial intelligence). Let’s delve into how AspenTech contributes to this dynamic sector
It’s no secret that oil and gas is a boom-and-bust industry. Production is currently up, projected to increase to 13.7 million barrels daily in 2024. But this won’t last forever. Whether production is up or down, the key to maximizing production, optimizing efficiency, and taking advantage of increased profits is innovation, digital transformation,and automation.For stakeholders looking to deliver safer, more efficient, and cheaper energy, innovation and automation must be a top priority. Those who fall behind in the race to innovate, ultimately, run the risk of losing market share.
Talking to Thomas Hundertmark, a senior partner in McKinsey’s Houston office, Darren Woods is chairman and CEO of ExxonMobil made some crucial points and also gave some insights on what the conglomerate was doing in order to save the climate.
Today oil and gas producers face severe regulatory and public relations obstacles due to the concern with greenhouse gases and resource depletion. Calgary-based start-up, Advanced Upstream (“AU”), has been disrupting the oil and gas industry with simple and reliable innovative technologies. AU’s products help the oil and gas producers to enhance energy production while reducing the corresponding environmental impact. By decreasing personnel and time on site, and lowering overall HSE risks across the board, the clients can see a notable improvement in their ESG rating, contributing to their bottom line.