On Tuesday, the U.S. government filed a lawsuit against JetBlue Airlines over its bid to purchase Spirit Airlines, claiming that doing so could make flying unaffordable for consumers on a tight budget who can’t afford the fees charged by other airlines.
The $3.8 billion agreement, revealed last July, would eliminate Spirit’s ability to hold down airline prices in places where they compete, according to the DOJ.
The lawsuit claims that the merger will also eliminate half of the highly low-cost fares in the United States, resulting in increased prices and fewer seats on routes across the country.
“JetBlue wants to abandon Spirit’s business model, remove seats from Spirit’s aircraft, and charge Spirit’s customers more rates if the transaction is approved,” U.S. After bringing the lawsuit in the United States, Attorney General Merrick Garland stated in remarks—Boston’s district court.
In a statement released by the DOJ, Assistant Attorney General Vanita Gupta claimed that “our case” claimed that JetBlue’s acquisition of Spirit would specifically harm budget-conscious consumers. “Ultra-low-cost airlines make air travel accessible so that more Americans can take a much-needed family vacation, celebrate a special occasion, or grieve with loved ones,” the statement reads.
The two airlines have been preparing for such a move and have given the DOJ additional documents as needed, but negotiations for a settlement were unsuccessful.
JetBlue CEO Robin Hayes said Tuesday on “CBS Mornings” that he was “disappointed but not shocked” because “we stated we didn’t think we would close until the first half of 2024, expecting a trial” when the Spirit shareholders approved the deal last year.
According to a joint statement from JetBlue and Spirit, the four largest airlines—American, Delta, United, and Southwest—control 80% of the market “after years of industry consolidation that the DOJ itself supported.”
Spirit CEO Ted Christie said in the statement, “We disagree with the DOJ’s decision to seek to prohibit the proposed merger, which will benefit consumers and employees.