U.S. sues to block JetBlue’s $3.8-billion purchase of Spirit Airlines

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U.S. sues to block JetBlue’s $3.8-billion purchase of Spirit Airlines
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The Biden administration said on Tuesday that the deal would reduce competition and drive up air fares for consumers

The Justice Department said the tie-up would especially hurt cost-conscious travellers who depend on Spirit to find cheaper options than they can find on JetBlueAttorney-General Merrick Garland was scheduled to hold a news conference to announce the lawsuit – a sign of the importance that the administration places on stopping further consolidation in the airline industry.

“If the acquisition is approved, JetBlue plans to abandon Spirit’s business model, remove seats from Spirit’s planes, and charge Spirit’s customers higher prices,” the department lawyers wrote. “JetBlue’s plan would eliminate the unique competition that Spirit provides – and about half of all ultra-low-cost airline seats in the industry – and leave tens of millions of travellers to face higher fares and fewer options.

JetBlue held on to hope that the administration would come around to its argument that the combination with Spirit would be far smaller than other deals and would help consumers by putting pressure on the bigger airlines. The Justice Department sued to block the last megadeal, American’s merger with US Airways, then reached a settlement that required the carriers to give up some gates and takeoff and landing slots at several major airports. Before that, the government allowed Delta to buy Northwest, United to merge with Continental, and it later let Southwest buy AirTran.

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