JetBlue-Spirit Deal Needs More Divestitures for Judge’s Approval
The U.S. government wants to stop JetBlue Airways from buying Spirit Airlines for $3.8 billion, saying it would hurt competition and raise prices for travelers. But a federal judge said on Tuesday that he might let the deal go ahead if JetBlue sells more of its assets, such as gates and slots at some airports.
The judge, William Young, said he was worried about blocking the merger in a changing industry that faced new challenges and opportunities after the COVID-19 pandemic. He also said he thought that without Spirit, which offers very low fares, airline prices would go up. Spirit is the seventh-largest U.S. airline, and JetBlue is the sixth-largest.
The trial ended with closing arguments from both sides. The Justice Department, six states, and Washington, D.C. filed a lawsuit in March to stop the merger, saying it would reduce competition in the airline industry.
JetBlue’s lawyer, Ryan Shores, said the judge could order JetBlue to sell more assets if he wanted to. He also said the merger would benefit consumers and help JetBlue become a stronger competitor to the bigger airlines.
The government’s lawyer, Daniel Duffy, said the merger would harm consumers by eliminating Spirit, which forces other airlines to lower their prices. He said JetBlue itself expected to raise fares by 30% after the merger. “This transaction is a bad deal for consumers,” Duffy said. “It risks reduction in competition.”