JetBlue’s $3.8 billion buyout of Spirit Airways is blocked by decide citing menace to competitors

Journey

The Justice Division sued to dam the merger, saying it could drive up fares by eliminating Spirit, the nation’s greatest low-cost airline.

A line of Spirit Airlines jets sit on the tarmac at Orlando International Airport.
A line of Spirit Airways jets sit on the tarmac at Orlando Worldwide Airport on Could 20, 2020, in Orlando, Fla. AP Picture/Chris O’Meara, File

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DALLAS (AP) — A federal decide is siding with the Biden administration and blocking JetBlue Airways from shopping for Spirit Airways, saying the $3.8 billion deal would scale back competitors.

The Justice Division sued to dam the merger, saying it could drive up fares by eliminating Spirit, the nation’s greatest low-cost airline.

JetBlue argued that the deal would assist customers by making JetBlue a stronger competitor in opposition to larger rivals that dominate the U.S. air-travel market.


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U.S. District Choose William Younger, who presided over a non-jury trial final 12 months, mentioned within the ruling Tuesday that the federal government had confirmed that the merger “would considerably reduce competitors” and violated a century-old antitrust regulation.

“Spirit is a small airline. However there are those that like it. To these devoted clients of Spirit, this one’s for you,” Younger wrote.

Shares of Spirit Airways Inc. plunged greater than half virtually instantly, whereas JetBlue shares gained 8%.

For JetBlue, the ruling was its second main setback in federal court docket in lower than a 12 months. One other decide in the identical Boston courthouse killed a partnership within the Northeast between JetBlue and American Airways.

JetBlue, the nation’s sixth-largest airline by income, now should give you one other progress plan. That shall be an project for incoming CEO Joanna Geraghty. Subsequent month she’s going to change Robin Hayes, who had engineered each of the offers which have now been blocked in court docket.