DOJ has filed suit for blocking JetBlue’s purchase of Spirit Airlines for nearly $4 billion

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.

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DOJ has filed suit for blocking JetBlue’s purchase of Spirit Airlines for nearly $4 billion