The Biden administration sued on Tuesday to block JetBlue Airways' $3.8 billion purchase of Spirit Airlines, saying the deal would reduce competition and drive up air fares. The Justice Department said the tie-up would especially hurt cost-conscious travelers who depend on Spirit to find cheaper options than they can find on JetBlue and other airlines. Attorney General Merrick Garland planned 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, per the AP.
"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 travelers to face higher fares and fewer options," wrote the Justice Department in the lawsuit. As signals grew that the government would challenge the deal, JetBlue CEO Robin Hayes and other company executives launched a preemptive campaign to make their argument that the deal would help consumers by creating a stronger competitor to the four carriers that control about 80% of the domestic air-travel market. Hayes said Tuesday that he was disappointed but not surprised at the lawsuit.
“We said when we got the offer approved by the Spirit shareholders last year that we didn’t think we would close until the first half of 2024, expecting a trial,” he said on CBS Mornings. The Justice Department was under pressure from Democratic lawmakers and consumer advocates who have complained about a wave of earlier mergers that regulators approved, and which left fewer airlines controlling a greater share of the market. JetBlue and Spirit together would control a little over 9% of the domestic market, far smaller than American, Delta, United, and Southwest.
(Read more JetBlue