A federal judge Tuesday blocked JetBlue Airways’s proposed $3.8 billion purchase of Spirit Airlines, arguing it would reduce competition and hurt consumers.
In a court filing Tuesday, U.S. District Judge William Young said the acquisition, which would have made JetBlue the fifth-largest airline, would “substantially lessen competition” in violation of the Clayton Act, which “was designed to prevent anticompetitive harms for consumers.”
Young noted that while the merger might make JetBlue more competitive against the nation’s major airlines, as the airlines argued, it also would eliminate JetBlue’s toughest competition — Spirit — which is the country’s biggest low-cost airline. That would drive up prices, particularly harming Spirit’s cost-conscious customers, he said.
“If JetBlue were permitted to gobble up Spirit -– at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline,” Young wrote.
“It would further consolidate an oligopoly by immediately doubling JetBlue’s stakeholder size in the industry. Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier,” Young added.
The ruling marks a significant win for the Justice Department, which sued to block the merger from proceeding.
Attorney General Merrick Garland said in March 2023 when announcing the legal action that “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,” The Associated Press reported.