JetBlue-Spirit deal faces DOJ antitrust suit this week
Justice Department and Department of Transportation are expected to take action to block JetBlue Airways’ $3.8 billion acquisition of Spirit Airlines, according to people familiar with the case.
The Justice Department is expected to file an antitrust lawsuit, perhaps on Tuesday, 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 TransThe portation 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.
JetBlue CEO Robin Hayes told the Miami Herald in a February interview that if the federal government tries to block the Spirit deal then the New York-based airline will go into federal court to make its case. Hayes, 56, said JetBlue believes it has compelling facts on its side that buying Miramarbased Spirit is pro-competitive and consumer friendly. Spirit is among the biggest airlines at Fort Lauderdale-Hollywood International Airport based on passenger market share and employs 3,400 people in South Florida.
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.
The timing of the complaint could slip to Wednesday, they said.
Spirit dropped 8.8% to $16.36, it’s steepest decline and lowest price since May 2022, in New York trading on Monday. JetBlue rose just under 1%.
The airlines met with the Justice Department last month in a final bid to avert a lawsuit by the antitrust agency. The proposed deal would make JetBlue the fifth-largest U.S. carrier based on domestic passenger traffic. The airline hopes to lure passengers away from larger competitors with lower fares and better onboard service.