The Biden administration, with an assist from Massachusetts AG Andrea Campbell’s office, is suing to block JetBlue Airways’ $3.8 billion purchase of Spirit Airlines, saying Tuesday that the deal would reduce competition and drive up air fares.
“If allowed to proceed, this merger will limit choices and drive up ticket prices for passengers across the country” and “eliminate Spirit’s unique and disruptive role in the industry,” said U.S. Attorney General Merrick Garland.
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.
Campbell, for her part, pointed out that JetBlue is a key player at Boston’s Logan Airport and that Spirit Airways maintains a presence there, too. Both airlines, she said, serve the Caribbean and Latin America, among other destinations. Eliminating Spirit Airlines in the market would reduce competition against all of the remaining airlines, not just with JetBlue, she said.
“When airlines compete on price, quality and innovative services, consumers benefit,” Campbell said. “Consumers should have a wide range of affordable air travel options.”
JetBlue and Spirit have anticipated a legal challenge for weeks. The Justice Department had previously requested additional documents and depositions about JetBlue’s proposal to buy Spirit, the nation’s biggest budget airline. Negotiations over a possible settlement failed.
JetBlue CEO Robin Hayes said Tuesday that he was disappointed but not surprised by the action.
“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.”
JetBlue and Spirit together would control a little over 9% of the domestic air-travel market, far smaller than American, Delta, United and Southwest. JetBlue executives repeatedly said their deal was not like Pepsi buying Coca-Cola — a line that Hayes repeated Tuesday.
But the Justice Department lawsuit, filed in federal district court in Boston, stressed that the deal would mean the end of the nation’s biggest “ultra-low-cost carrier.” Those are airlines that generally provide the cheapest fares but also tend to charge more fees.
Department lawyers said Spirit’s demise would eliminate about half of all ultra-low-cost seats in the market.
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.
Last year, JetBlue torpedoed a deal between Spirit and Frontier Airlines, then beat Frontier in a bidding war. Frontier CEO Barry Biffle argued that regulators would block a JetBlue-Spirit deal but not a tie-up with his airline, a similar discount carrier.
The largest union for flight attendants, the Association of Flight Attendants, reiterated its support for the merger Tuesday, which it said would lift pay and benefits for Spirit crews that it represents.
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