JBLU - DOJ issues challenge to JetBlue Spirit merger

2023-03-07 10:39:26 ET

As expected , the Department of Justice filed an antitrust suit to block JetBlue Airways ( NASDAQ: JBLU ) proposed merger with Spirit Airlines ( NYSE: SAVE ) on Tuesday.

The department’s official complaint was filed in federal court in Boston on Tuesday. The complaint alleges that the combination of the two airlines would be an adverse development for consumers, raising prices and eliminating competition.

JetBlue, for its part, preempted the complaint by arguing that fares will remain low post-merger in a press release on Monday evening.

“The combination of JetBlue and Spirit plus the rapid growth of ULCCs will assure increased competition and low fares,” the airline argued. “As JetBlue retrofits Spirit's aircraft with its leading customer-focused experience (e.g., adding more leg room and other onboard amenities), the combined airline will be able to meaningfully increase aircraft utilization, offsetting seats removed in the retrofitting process by adding more flights. This will result in more seats with Blue Basic Fares, and coupled with the rapid growth of the ULCCs, will create a more competitive environment and ongoing access for the most price-sensitive customers.”

Bloomberg reported on Monday that the Department of Transportation was likely to pursue a parallel action, moving to block Spirit’s airline certificate transfer due to the merger being “inconsistent with the public interest.” As of yet, no such action has been announced.

This story is developing and will be updated as details become available.

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