DOJ Expected to Block JetBlue / Sprit Merger
According to two anonymous sources familiar with the matter, the Justice Department plans to file a lawsuit as early as Tuesday to prevent JetBlue's proposed $3.8 billion acquisition of Spirit Airlines. The lawsuit alleges that the acquisition would remove an essential low-cost carrier, further consolidating the industry and increasing prices, potentially resulting in antitrust concerns. If the DOJ ultimately decides to block the merger, it will be the second antitrust action JetBlue faces.
As reported by Bloomberg, the Biden administration's recent efforts to enforce antitrust regulations in the airline industry have led to the likely lawsuit against JetBlue's proposed acquisition of Spirit Airlines.
A spokesperson for JetBlue confirmed that the airline is bracing for a lawsuit, which it expects "this week." Spirit and the Department of Justice did not issue public statements.
According to Bloomberg, a lawsuit from the Department of Justice could foil the merger between the two carriers for over a year. However, if the JetBlue / Spirit merger gets approval from Federal Regulators, it will create the fifth-largest carrier behind American, United, Delta, and Southwest.
The Justice Department has taken a dim view of the argument from JetBlue CEO Robin Hayes that a merger between his airline and Spirit would create lower prices for air travelers. In public statements, Hayes predicted that a post-merger Spirit would adopt JetBlue boarding policies, which use fewer seats. Hayes explained that removing seating capacity from the market would lower prices since fewer seats for sale would mean faster boarding times and more flights overall.
The Department of Justice has studied the effect a JetBlue / Spirit merger will likely have on airfares. If the Department moves to block the merger, it will signal that Federal Regulators have come to the opposite conclusion.
In response to concerns expressed by the Department of Justice, JetBlue has proposed a plan to sell Spirit's assets in their entirety at Newark Liberty International Airport in New Jersey, New York's LaGuardia Airport, and Boston Logan International Airport in Massachusetts, and five slots at Fort Lauderdale-Hollywood International Airport in Florida. Jetblue is not offering to divest itself of assets related to its "Northeast Partnership" with American Airlines. That deal has been called a "de facto merger" by the Justice Department.
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DOJ Expected to Block JetBlue / Spirit Merger
March 6, 2023
According to two anonymous sources familiar with the matter, the Justice Department plans to file a lawsuit as early as Tuesday to prevent JetBlue's proposed $3.8 billion acquisition of Spirit Airlines. The lawsuit alleges that the acquisition would remove an essential low-cost carrier, further consolidating the industry and increasing prices, potentially resulting in antitrust concerns. If the DOJ ultimately decides to block the merger, it will be the second antitrust action JetBlue faces.
As reported by Bloomberg, the Biden administration's recent efforts to enforce antitrust regulations in the airline industry have led to the likely lawsuit against JetBlue's proposed acquisition of Spirit Airlines.
A spokesperson for JetBlue confirmed that the airline is bracing for a lawsuit, which it expects "this week." Spirit and the Department of Justice did not issue public statements.
According to Bloomberg, a lawsuit from the Department of Justice could foil the merger between the two carriers for over a year. However, if the JetBlue / Spirit merger gets approval from Federal Regulators, it will create the fifth-largest carrier behind American, United, Delta, and Southwest.
The Justice Department has taken a dim view of the argument from JetBlue CEO Robin Hayes that a merger between his airline and Spirit would create lower prices for air travelers. In public statements, Hayes predicted that a post-merger Spirit would adopt JetBlue boarding policies, which use fewer seats. Hayes explained that removing seating capacity from the market would lower prices since fewer seats for sale would mean faster boarding times and more flights overall.
The Department of Justice has studied the effect a JetBlue / Spirit merger will likely have on airfares. If the Department moves to block the merger, it will signal that Federal Regulators have come to the opposite conclusion.
In response to concerns expressed by the Department of Justice, JetBlue has proposed a plan to sell Spirit's assets in their entirety at Newark Liberty International Airport in New Jersey, New York's LaGuardia Airport, and Boston Logan International Airport in Massachusetts, and five slots at Fort Lauderdale-Hollywood International Airport in Florida. Jetblue is not offering to divest itself of assets related to its "Northeast Partnership" with American Airlines. That deal has been called a "de facto merger" by the Justice Department.
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