Judge blocks JetBlue’s $3.8B buyout of Spirit Airlines

The Associated Press

11 months ago

FILE - A line of Spirit Airlines jets sit on the tarmac at Orlando International Airport on May ... — FILE – A line of Spirit Airlines jets sit on the tarmac at Orlando International Airport on May 20, 2020, in Orlando, Fla. A 6-year-old boy who left on a flight for the Christmas holiday to visit his grandmother was put on the wrong plane. When the grandmother, up on Thursday, Dec. 21, 2023 at the airport in Fort Myers to greet her grandson who was flying for the first time from Philadelphia, she was told he wasn’t on the Spirit Airlines flight. (AP Photo/Chris O’Meara, File)

FILE – A JetBlue airplane is shown at John F. Kennedy International Airport in New York, March 16, 2017. JetBlue said Monday, Jan. 8, 2024, that CEO Robin Hayes will step down next month and be replaced by the airline’s president, Joanna Geraghty, who will be the first woman to lead a major U.S. carrier. (AP Photo/Seth Wenig, File)

DALLAS — A federal judge is siding with the Biden administration and blocking JetBlue Airways from buying Spirit Airlines, saying the $3.8 billion deal would reduce competition.

The Justice Department sued to block the merger, saying it would drive up fares by eliminating Spirit, the nation’s biggest low-cost airline.

JetBlue argued that the deal would help consumers by making JetBlue a stronger competitor against bigger rivals that dominate the U.S. air-travel market.

U.S. District Judge William Young, who presided over a non-jury trial last year, said in the ruling Tuesday that the government had proven “that the merger would substantially lessen competition in a relevant market.”

Shares of Spirit Airlines Inc. plunged more than 53 percent almost immediately.

The competition issue isn’t a factor in Las Vegas.

In Las Vegas, Spirit is the second busiest commercial carrier at Harry Reid International Airport, carrying 7.7 million passengers in the first 11 months of 2023. JetBlue ranks ninth and has carried 860,224 passengers in 2023.

Spirit flies an average 71.3 flights a day to 42 destinations while JetBlue has an average 6.5 flights a day to four cities.

The only competitive crossovers the airlines have from Las Vegas are flights to and from Boston’s Logan International Airport — two daily flights by JetBlue compared with one by Spirit — and to and from Los Angeles International where JetBlue has 10 round-trip nonstop flights a week compared with Spirit’s 32 flights a week.

In both of those cities, JetBlue and Spirit compete with other carriers as well.