Back in 2022, discount air travel service Spirit Airlines put itself up for auction, seeking a more substantial company to merge with. The ultimate winner of the bidding war was carrier JetBlue, who announced that they would be acquiring Spirit in its entirety for $3.8 billion.
However, antitrust watchdog organizations and the US Department of Justice have expressed discontent with the burgeoning deal, saying that many lower-income flyers depend on Spirit’s lower air rates. In the event of the acquisition, these lower rates could disappear, which would prove problematic for the industry overall, alongside the general loss of a major airline carrier. To this end, the Department of Justice lawyers are prepping a lawsuit to block the merger.
In response to the lawsuit’s announcement, JetBlue CEO Robin Hayes told CBS that while the Justice Department’s announcement is unfortunate, it is not outside the company’s expectations. “We said when we got the offer approved by the Spirit shareholders last year that we didn’t think we would close ’til the first half of 2024, expecting a trial,” he said.
The Justice Department is expected to file suit to block a merger between JetBlue Airways and Spirit Airlines, arguing that the $3.8 billion deal will be particularly harmful to price-sensitive consumers who have come to depend on Spirit’s low fares. https://t.co/NVMbLkE414
— The Washington Post (@washingtonpost) March 7, 2023
Hayes attempted to assuage anticompetitive concerns, saying the merger is not “Pepsi buying Coke.”
“JetBlue and Spirit together will be 8% or 9%” of the country’s air travel, he said. “Most people are still going to be flying on the other airlines. That’s where you’ll save the huge dollars — by having a bigger JetBlue.”
Image Source: CNBC