JetBlue’s $3.8 billion buyout of Spirit Airlines is blocked by judge citing threat to competition – Daily News

on Jan17
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DALLAS — A federal judge is siding with the Biden administration and blocking JetBlue Airways from buying Spirit Airlines, saying the $3.8 billion deal would reduce competition.

The Justice Department sued to block the merger, saying it would drive up fares by eliminating Spirit, the nation’s biggest low-cost airline.

JetBlue argued that the deal would help consumers by making JetBlue a stronger competitor against bigger rivals that dominate the U.S. air-travel market.

U.S. District Judge William Young, who presided over a non-jury trial last year, said in the ruling Tuesday that the government had proven that the merger “would substantially lessen competition” and violated a century-old antitrust law.

FILE – A line of Spirit Airlines jets sit on the tarmac at Orlando International Airport on May 20, 2020, in Orlando, Fla. A 6-year-old boy who left on a flight for the Christmas holiday to visit his grandmother was put on the wrong plane. When the grandmother, up on Thursday, Dec. 21, 2023 at the airport in Fort Myers to greet her grandson who was flying for the first time from Philadelphia, she was told he wasn’t on the Spirit Airlines flight. (AP Photo/Chris O’Meara, File)

“Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you,” Young wrote.

Shares of Spirit Airlines Inc. plunged more than half almost immediately, while JetBlue shares gained 8%.

For JetBlue, the ruling was its second major setback in federal court in less than a year. Another judge in the same Boston courthouse killed a partnership in the Northeast between JetBlue and American Airlines.

JetBlue, the nation’s sixth-largest airline by revenue, now must come up with another growth plan. That will be an assignment for incoming CEO Joanna Geraghty. Next month she will replace Robin Hayes, who had engineered both of the deals that have now been blocked in court.

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