DOJ sues to block $3.8B JetBlue-Spirit Airlines merger, saying it will mean higher fares for customers
The Justice Department said the merger would raise fares, limit choices for millions of Americans
AG Garland: JetBlue-Spirit Airlines merger will drive up consumer prices
Attorney General Merrick Garland on Tuesday unveiled a lawsuit to block the $3.8 billion JetBlue-Spirit Airlines merger, saying it will limit consumers choices and drive up fares.
The Justice Department sued Tuesday to block JetBlue Airways' $3.8 billion purchase of Spirit Airlines.
The department said, in a 43-page document, that the merger would reduce competition and drive up fares for consumers.
Specifically, the department asserted that the deal would hurt cost-conscious travelers who depend on Spirit to find cheaper fares.
"If the acquisition is approved, JetBlue plans to abandon Spirit’s business model, remove seats from Spirit’s planes, and charge Spirit’s customers higher prices," the department lawyers wrote. "JetBlue’s plan would eliminate the unique competition that Spirit provides — and about half of all ultra-low-cost airline seats in the industry — and leave tens of millions of travelers to face higher fares and fewer options."
JETBLUE, SPIRIT BRACE FOR JUSTICE DEPARTMENT LAWSUIT TO BLOCK AIRLINES' MERGER
JetBlue and Spirit have expected the challenge for weeks and negotiations over a possible settlement failed.
A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images / Getty Images)
JetBlue CEO Robin Hayes told "CBS Mornings" on Tuesday that he was disappointed but not surprised by the lawsuit.
"We said when we got the offer approved by the Spirit shareholders last year that we didn’t think we would close until the first half of 2024, expecting a trial," he said.
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WASHINGTON, DC - AUGUST 11: U.S. Attorney General Merrick Garland delivers a statement at the U.S. Department of Justice August 11, 2022, in Washington, D.C. ((Photo by Drew Angerer/Getty Images) / Getty Images)
JetBlue and Spirit executives argued that the merger would help consumers by creating a stronger competitor to the four carriers that control about 80% of the domestic air-travel market.
Attorney General Merrick Garland said that the department's complaint alleges that the proposed merger violates Section 7 of the Clayton Act.
"By acquiring Spirit, JetBlue will eliminate the largest ultra low coast carrier in the United States," he told reporters in a news briefing, adding that both airlines have large combined market shares and highlighting that JetBlue planned to remove seats from Spirit's planes and charge customers higher prices.
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Airplane model is placed on displayed alongside Spirit Airlines and jetBlue Airways logos in this illustration taken, June 21, 2022. (REUTERS/Dado Ruvic/Illustrations / Reuters Photos)
"We allege that JetBlue's proposed takeover of Spirit will only exacerbate concentration and further stifle completion in the airline industry," Garland stated, saying that approval would increase the risk that remaining airlines could coordinate to raise prices or reduce capacity. "The Justice Department is suing to prevent that from happening."
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The Associated Press contributed to this report.