• by Tanya Gazdik , January 16, 2024

JetBlue Airways' proposed acquisition of budget carrier Spirit Airlines has been blocked, at least for now. 

It’s a victory for the Department of Justice, which argued that the deal was anticompetitive and would harm travelers.

“JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers,” U.S. District Court Judge William Young wrote in his decision. 

The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares, according to the 109-page ruling.

“Spirit has grown rapidly in recent years by offering cheap fares and fees for everything else from seat assignments to carry-on luggage, a no-frills model that has become a favorite punchline for late-night comedians,” according to CNBC.

“Spirit is a small airline. But there are those who love it,” Young wrote in his ruling. “To those dedicated customers of Spirit, this one’s for you.”

It might not be luxurious, but the airlines has always offered amazing deals. For example, there's currently a deal offering $54 for a one-way ticket from Detroit to Fort Myers, Florida. 

It might be a good deal for frugal travelers, but the decision is bad news for Spirit Airlines.

“Spirit Airlines shares tanked 52% on Tuesday after a federal judge in Boston ruled against JetBlue’s proposed $3.8 billion acquisition of the discount airline,” according to CNN Business. JetBlue shares gained 3% after the news.

The proposed merger would have created the nation’s fifth-largest airline. 

“Years of previous consolidation left United, Delta, American and Southwest in control of about three-quarters of the domestic market,” notes CNBC.

The four largest U.S. airlines — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines — control about two-thirds of the market, according toThe New York Times. The merger would have given JetBlue a market share of 10%, slightly behind United, the fourth-largest U.S. airline, which has 16%.

JetBlue and Spirit disagree with the ruling.

“We continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers,” JetBlue and Spirit said in a joint emailed statement to CNN. “We are reviewing the court’s decision and are evaluating our next steps as part of the legal process.”

The airlines’ merger agreement doesn’t expire until July, and they could appeal to the First Circuit, U.S. Court of Appeals in Boston.

The decision is a win for the Biden administration and its antitrust enforcement stance. 

It “will bolster the government’s case as it starts reviewing the pending merger between Alaska Air and Hawaiian Airlines, and as it nears a decision on Korean Air’s takeover of Asiana Airlines," according to Politico. “Consolidation in the sector has been relatively quiet in recent years following decades of mergers, culminating in American Airlines’ takeover of U.S. Airways, which was finalized in 2015.”