In the year 2022, budget airline Spirit Airlines initiated an auction to find a larger company for possible integration. The outcome of the competitive bidding process saw JetBlue emerge victorious, as they revealed their acquisition of Spirit for a total of $3.8 billion.
Nevertheless, various antitrust organizations and the US Department of Justice have voiced concerns regarding the impending merger. They argue that many financially disadvantaged travelers rely on Spirit’s affordable airfares. If the acquisition proceeds, these economical fares may vanish, posing challenges within the industry along with the loss of a major airline carrier. Consequently, lawyers from the Department of Justice are gearing up to file a lawsuit to prevent the merger.
JetBlue’s CEO, Robin Hayes, in response to the lawsuit’s announcement, conveyed to CBS that the Justice Department’s decision, though regrettable, was within the company’s expectations. “When we gained approval from Spirit’s shareholders last year, we foresaw a delay in finalizing the deal until the first half of 2024, anticipating legal proceedings,” he remarked.
The Justice Department plans to legally challenge the merger between JetBlue Airways and Spirit Airlines, contending that the $3.8 billion agreement could disproportionately impact cost-conscious consumers who rely on Spirit’s competitive prices. https://t.co/NVMbLkE414
— The Washington Post (@washingtonpost) March 7, 2023
Hayes sought to alleviate concerns about antitrust implications by comparing the merger to “Pepsi buying Coke.”
“JetBlue and Spirit combined will represent 8% to 9%” of the country’s air travel market,” he explained. “The majority of travelers will still opt for other airlines. The substantial savings will come from having a larger JetBlue.”
