Judge halts $3.8B JetBlue acquisition of Spirit Airlines
OAN’s Abril Elfi
4:18 PM – Tuesday, January 16, 2024
A federal judge has blocked the JetBlue Airways Corporation from buying Spirit Airlines.
On Tuesday, a federal judge took the side of the Biden administration and blocked JetBlue from buying the airline, arguing that the $3.8 billion deal would reduce competition.
United States Judge William Young maintained that the government had proven the merger “would substantially lessen competition” and that it violated a century-old antitrust law.
The judge acknowledged the Justice Department’s contention that Spirit is especially significant to passengers seeking an affordable airline substitute in his more than 100-page decision.
“Spirit is a small airline. But there are those who love it,” he wrote. “To those dedicated customers of Spirit, this one’s for you.”
Shares of Spirit Airlines Inc. went down by nearly 47% after the ruling, while JetBlue shares went up 5%.
A JetBlue spokesperson said that the corporation disagreed with the ruling and was potentially considering whether to appeal, arguing that it needs the deal to better compete against bigger rivals that dominate the U.S. air-travel market.
“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.
The Biden administration, which has worked hard to oppose industry consolidation on the grounds that it “harms consumers,” celebrated the judge’s decision.
The Justice Department argued in the airline case that travelers who rely on Spirit’s “inexpensive fares” would be particularly inconvenienced if JetBlue were permitted to purchase Spirit.
Attorney General Merrick Garland stated that the “ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices” if the deal had gone through.
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Why does JetBlue argue that the deal with Spirit Airlines is necessary for them to compete against larger rivals in the U.S. air-travel market
Federal Judge Blocks JetBlue from Buying Spirit Airlines
On Tuesday, a federal judge took the side of the Biden administration and blocked JetBlue Airways Corporation from purchasing Spirit Airlines, citing concerns about reduced competition. United States Judge William Young stated that the $3.8 billion deal would substantially lessen competition and violate antitrust laws that have been in place for over a century.
In his more than 100-page decision, Judge Young acknowledged the importance of Spirit Airlines to passengers seeking affordable alternatives, stating, ”Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you.”
Following the ruling, shares of Spirit Airlines Inc. dropped by nearly 47%, while JetBlue shares experienced a 5% increase. This ruling further adds to the challenging month for airline stocks.
A spokesperson for JetBlue expressed disagreement with the ruling and stated that the company is potentially considering whether to appeal. They argue that the deal is necessary for JetBlue to better compete against larger rivals that dominate the U.S. air-travel market. JetBlue believes that the combination of the two airlines would provide much-needed competition and choice, bringing low fares and great service to more customers in various markets.
The Biden administration, which has actively opposed industry consolidation due to its negative impact on consumers, celebrated the judge’s decision. The Justice Department argues that travelers who rely on Spirit’s inexpensive fares would be greatly inconvenienced if JetBlue were allowed to purchase Spirit.
Attorney General Merrick Garland stated that the ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices if the deal had gone through.
This decision marks a significant setback for JetBlue’s expansion plans and highlights the ongoing efforts by the Biden administration to promote competition and protect consumer interests in the airline industry.
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