oann

US aims to prevent JetBlue’s acquisition of Spirit Airlines through legal proceedings.


By Nate Raymond

October 31, 2023 –⁤ 2:57 PM UTC

Advertisement

BLOCKING JETBLUE’S ACQUISITION OF SPIRIT AIRLINES URGED BY ‍DOJ LAWYER

BOSTON (Reuters) –

A U.S. Department⁢ of Justice lawyer on Tuesday urged a federal judge ‍to block JetBlue Airways’ (JBLU.O) planned $3.8 billion acquisition‍ of ultra-low-cost carrier​ Spirit Airlines‍ (SAVE.N) at the start of closely-watched antitrust⁣ trial.

The case ‌in federal court in Boston is part of a broad ​effort by ​President Joe‌ Biden’s ⁣administration to preserve ⁤competition among the lowest cost airlines, ensuring air travel remains affordable⁤ for many more US consumers.

Justice Department attorney ⁢Arianna Markel ‌in her opening statement told U.S. District Judge William Young that the deal would lead to fewer‍ flights and seats and higher prices.

She said a JetBlue internal analysis projected its fares would increase 30% once Spirit, ⁤which competes with JetBlue on around ⁤100 routes nationally, is⁢ not a competitor. Passengers would suffer roughly ⁣$1 ⁤billion in net harm annually, she said.

“JetBlue ‌is counting on the fact that eliminating⁣ Spirit and the competition Spirit provides ⁣will allow ⁣JetBlue to raise fares,” Markel said.⁢ “That is ​real harm to real people.”

JetBlue attorney Ryan Shores countered that the case was⁣ a “misguided” challenge ⁤to ‍a merger between the U.S.’s sixth and⁣ seventh largest airlines, ​which combined control⁤ less than​ 8% of the domestic market dominated by four larger airlines.

Those ⁢four U.S. carriers ⁤– United Airlines (UAL.O), American Airlines (AAL.O),‌ Delta⁤ Air Lines (DAL.N) and Southwest Airlines (LUV.N) – dominate 80% of the ⁢domestic market following a‍ series of previous ‌airline mergers that⁣ the federal government blessed, Shores ​said.

Yet Shores said the‍ government had⁣ wrongly tried to bar JetBlue from growing into a larger challenge‍ to those four airlines and disrupt a market that has become “bad for competition and bad‌ for consumers.”

“The ⁢government in⁢ this case has ‌lost the forest‌ for the⁣ trees,” Shores said.

The trial began⁣ on the⁣ same day JetBlue posted lower-than-expected third-quarter results, citing air traffic control and weather delays during the ⁢summer ​travel season, and​ projected a larger-than-expected fourth-quarter loss.

Its⁣ shares were down‍ 16.7% to​ a near 12-year low in morning trading.

JetBlue‍ has called the deal pro-consumer and has sought to ease U.S. regulators’ antitrust concerns ⁤by agreeing⁤ to sell ‍off Spirit’s gates and slots at certain airports in New⁤ York ⁤City, Boston, ⁣Newark and Fort Lauderdale.

But⁣ the​ Justice Department has said those divestitures are not ⁤enough, and in a lawsuit filed in March argued the combined airline would harm consumers by increasing fares and reducing choice​ on routes nationwide.

The department is ‍suing alongside Democratic attorneys general⁣ from six states and the District of Columbia. ​They ​call⁢ Spirit a “disruptive and innovative airline” whose low-cost, ​no-frills model has forced price cuts ⁢industry-wide.

The department’s case ⁤is ⁢part of a ​broader push by⁤ the Biden administration to aggressively step up antitrust enforcement, an initiative that has had mixed results ⁢in​ court.

JetBlue was already the focus of one of its earlier cases,⁢ with a different Boston judge,‌ Leo Sorokin, in ‌May siding with the government ⁣in finding that JetBlue’s ⁤U.S. Northeast partnership with American Airlines violated⁢ antitrust law.

JetBlue subsequently decided ​to terminate the alliance. American Airlines is appealing Sorokin’s decision.

Reporting by Nate ⁣Raymond in Boston, ⁤Additional reporting by Jonathan Stempel in New York; Editing by Alexia Garamfalvi, Nick Zieminski and Marguerita Choy

Advertisement

Share this​ post!

Trump has a busy week, as a Colorado case‌ could remove him ‍from the ballot via the 14th Amendment, ‍while Judge Chutkan revives his gag order.

On this day⁤ in 1967 Americans heard the⁢ voice⁢ of Tennessee‌ icon ⁢Dolly Parton‍ Propelling⁤ the country music ‌singer from obscurity to global acclaim.​

A Federal judge re-imposes a⁢ gag order‌ on 45th President Donald Trump ending a temporary ‍suspension.

After a mass shooting leaves 18 people dead and⁣ another ⁣13 people injured, the ‍residents of Lewiston, Maine gather for a Halloween event.

China’s most popular social media platforms announced that “self-media” accounts with more than 500,000 followers will be asked ‌to display real-name information

Intel rose more than 9% on Friday and sparked ‌a jump in chip stocks after the personal computer ⁤market was rebounding from⁢ its ‍quarters-long slump.

Amazon.com rose 7% on Friday as it aims‍ for a larger share of ‍the booming artificial intelligence market in‍ a race with Microsoft.

Malaysia’s communications regulator will issue a​ warning to social media firms⁤ TikTok and Meta for allegedly blocking pro-Palestinian content on their platforms.

rnrn

How are European airlines⁤ planning to reduce ⁤fares?

Style=”min-width: 320px; min-height: ‌50px; text-align: center;”>

Advertisement

Recommended For You

European airlines‍ plan to cut‍ fares ⁢thanks to higher fuel efficiency

The aviation industry is ‌committed to reducing its​ carbon‍ emissions⁣ and shifting towards sustainable fuels, but airlines​ are also set to benefit economically from these changes. The improved fuel efficiency of new airplanes will allow European carriers​ to cut their fares by an estimated 4-15% over the next decade. This is⁣ great news for​ travelers, who will enjoy cheaper flights while contributing to a greener future.



" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
*As an Amazon Associate I earn from qualifying purchases

Related Articles

Sponsored Content
Back to top button
Available for Amazon Prime
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker