Federal blocks for Jetblue- Spirit deal
The Justice Department and Department of Transportation are expected to take action as soon as Tuesday to block Jetblue Airways’ $3.8 billion merger with Spirit Airlines, according to people familiar with the case.
The Justice Department is expected to file an antitrust lawsuit in federal court, alleging that the elimination of Spirit would increase ticket prices and decrease options for travelers, according to the people, who spoke on the condition of anonymity to discuss an ongoing case. The Department of Transportation is expected to begin a parallel proceeding to block the transfer of Spirit’s airline operating certificate as incompatible with the public interest, the people said.
The move by DOT is largely unprecedented in the modern era. The agency hasn’t used its authority to block the transfer of a certificate, or the formal Federal Aviation Administration approval to operate aircraft and carry passengers, among major airlines since the industry was deregulated in 1978.
The Justice Department’s suit is expected to focus on what it sees as potential harm to fliers, including fewer choices in booking flights and higher prices on all tickets for routes where there is no budget airline. Having an airline like deep-discounter Spirit as an option serves to keep prices lower for all passengers, even those who fly with other carriers, the people said.
Spirit dropped 5.2 percent — its steepest drop in more than five months — to $16.89, the lowest level since May 2022, as of 2:07 p.m. in New York. Jetblue was trading up 2 percent.