2023-03-06 16:11:29 ET
Spirit Airlines ( NYSE: SAVE ) stock tumbled 8.76% on Monday as the market assessed reports that regulators are ready to quash its proposed merger between JetBlue Airways.
Both the Department of Transportation and Department of Justice are looking to halt the deal on the grounds that the merger would be anti-competitive, according to Bloomberg. The outlet said that a suit could be filed as soon as Tuesday by the DOJ.
Meanwhile, the Department of Transportation is said to be readying a parallel proceeding to “block the transfer of Spirit’s airline certificate as incompatible with the public interest.” An unprecedented move for the agency.
JetBlue ( JBLU ) indicated it would challenge any regulatory move to block the merger on Monday. Additionally, the airline released a statement outlining the benefits of the combination for consumers and downplaying the market share of the two carriers.
“While JetBlue, with its highly unique combination of low fares and great service, will be able to expand with new national breadth as a result of the transaction, it will remain a significantly smaller player than each of the Big Four airlines,” JetBlue said. “According to the data, a combined JetBlue and Spirit will have only about 9% market share, compared to about 16-24% for each of the four largest airlines, but the added scale and ability to further grow will result in meaningful competition on more routes to more destinations and greater opportunities for Crewmembers and Team Members of both airlines.”
Shares of JetBlue rose modestly on Monday.
Read more on FAA outages impacting flights on Monday afternoon .
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Why did Spirit Airlines stock slide on Monday? JetBlue deal looks potentially doomed