In a significant legal development, a federal court has intervened to block the proposed merger between JetBlue and Spirit Airlines.
The U.S. District Court for the District of Massachusetts presided over by Judge William G. Young, ruled in favor of the Justice Department's lawsuit filed in March 2023.
Federal court blocks JetBlue-Spirit Airlines merger https://t.co/HLH8NrtVjz https://t.co/HLH8NrtVjz
— Washington Examiner (@dcexaminer) January 16, 2024
The lawsuit contended that the merger would negatively impact competition within the airline industry.
"But on Tuesday, a federal judge in Boston ruled that the deal violated antitrust law. The U.S. Justice Department had sued to stop the deal, arguing that consumers would be harmed and forced to pay higher fares if Spirit — the nation’s biggest discount airline — were eliminated," the Associated Press reported.
Judge Young, in his decision, expressed the court's attempt to navigate the complexities of a post-COVID-19 market recovery and uncertain times. Citing a violation of Section 7 of the Clayton Act, the court issued a permanent injunction against the proposed acquisition.
JetBlue responded to the court's ruling, expressing disagreement and asserting that it had addressed any legitimate anticompetitive concerns raised by the Justice Department.
The airline conveyed its intention to review the decision and assess its next legal steps, emphasizing its belief that the merger presented an opportunity to enhance competition and choice.
“We disagree with the U.S. District Court’s 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 stated.
"JetBlue’s termination of the Northeast Alliance and commitment to significant divestitures have removed any reasonable anti-competitive concerns that the Department of Justice raised,” it added.
The Justice Department, which had filed the lawsuit asserting concerns about the elimination of Spirit's disruptive business model, celebrated the court victory.
The department argued that the proposed acquisition would heighten the risk of coordinated behavior by placing Spirit's assets entirely under JetBlue's control.
This legal development follows the Justice Department's earlier success in dismantling JetBlue's Northeast Alliance with American Airlines, citing violations of antitrust laws.
The court's decision on Tuesday reinforces the government's position on preserving competition within the airline industry and preventing potential anti-competitive practices.
The ongoing legal battle reflects the complex interplay of interests and regulatory scrutiny in the aviation sector, as both JetBlue and Spirit Airlines navigate the challenges associated with merger attempts and competition concerns.
