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U.S. NEWS Wednesday 8 March 2023
U.S. sues to block JetBlue from buying Spirit Airlines

By DAVID KOENIG — thanks to their own DOJ- JetBlue and Spirit would
AP Airlines Writer approved mergers — con- control a little over 9% of
The Biden administration trol about 80% of the U.S. the domestic air-travel
sued to block JetBlue Air- market,” Hayes said. market, far smaller than
ways’ $3.8 billion purchase JetBlue and Florida-based American, Delta, United
of Spirit Airlines, saying Tues- Spirit have anticipated a and Southwest. JetBlue ex-
day that the deal would legal challenge for weeks. ecutives repeatedly said
reduce competition and The Justice Department their deal was not like Pepsi
drive up air fares for con- had previously requested buying Coca-Cola — a line
sumers. additional documents and that Hayes repeated Tues-
The Justice Department depositions about JetBlue’s day.
said the tie-up would espe- proposal to buy Spirit, the However, their concentra-
cially hurt cost-conscious nation’s biggest budget tion is much higher on cer-
travelers who depend on airline. Negotiations over a tain routes in the East. The
Spirit to find cheaper op- possible settlement failed. Justice Department lawsuit
tions to JetBlue and other As signals grew stron- said the two account for A JetBlue Airways Airbus A320, left, passes a Spirit Airlines
airlines. ger that the government nearly 50% of the traffic be- Airbus A320 as it taxis on the runway, July 7, 2022, at the Fort
Attorney General Merrick would challenge the tie- tween Boston and Miami Lauderdale-Hollywood International Airport in Fort Lauderdale,
Garland held a news con- up, JetBlue launched a and Fort Lauderdale, and Fla. Associated Press
ference to announce the pre-emptive campaign to nearly 90% between Boston
antitrust lawsuit — a sign make its argument that the and San Juan, Puerto Rico.
of the importance that the deal would help consum- The Justice Department tlement that required the government allowed Delta
administration places on ers by creating a stronger sued to block the last carriers to give up some to buy Northwest, United
stopping further consolida- competitor to the four larg- megadeal, American’s gates and takeoff and to merge with Continental,
tion in the airline industry. er carriers. 2013 merger with US Air- landing slots at several ma- and it later let Southwest
“If allowed to proceed, this Hayes said he was disap- ways, then reached a set- jor airports. Before that, the buy AirTran.q
merger will limit choices pointed but not surprised
and drive up ticket prices at the lawsuit.
for passengers across the “We said when we got the
country” and “eliminate offer approved by the Spirit
Spirit’s unique and disrup- shareholders last year that
tive role in the industry,” he we didn’t think we would
said. close until the first half of
The Justice Department 2024, expecting a trial,” he
lawsuit, filed in federal said on “CBS Mornings.”
district court in Boston, The lawsuit is the latest by
stressed that the deal the Biden administration
would mean the end of the to seek to block mergers in
nation’s biggest “ultra-low- industries including health
cost carrier.” Those are air- care, sugar refining, video
lines that generally provide gaming and publishing. It
the cheapest fares but also has already lost the health
tend to charge more fees. care and sugar battles.
The Justice Department “They don’t seem to be
lawyers said Spirit’s demise afraid of losing cases.
would eliminate about half They’re hoping that if they
of all ultra-low-cost seats in win some, that will set a
the market. It cited a Spir- precedent and help them
it estimate that average deter other mergers that
fares fall 17% when it enters they view as anti-compet-
a route, and a JetBlue cal- itive,” said Florian Ederer,
culation that fares rise 30% an antitrust expert at Yale
when Spirit leaves a route. University. He thinks the
The airlines vowed to con- government has a strong
tinue fighting to salvage case against the JetBlue
their agreement. deal.
JetBlue CEO Robin Hayes The Justice Department
said the merger would was under pressure from
boost competition by mak- Democratic lawmakers
ing his New York-based air- and consumer advocates
line bigger and better able who complained about a
to go up against American, wave of earlier mergers.
United, Delta and South- In 2021, the administration
west. He blamed the DOJ took a more aggressive ap-
for airline consolidation. proach, suing to kill a lim-
“We believe the DOJ has ited partnership between
got it wrong on the law JetBlue and American
here and misses the point Airlines in the Northeast. A
that this merger will cre- federal judge in Boston is
ate a national low-fare, expected to issue a ruling
high-quality competitor to soon, after a non-jury trial
the Big Four carriers which last fall.