Spirit Airlines Stock Falls 50% After Judge Blocks JetBlue Deal
A federal judge on Tuesday blocked JetBlue Airways from acquiring Spirit Airlinesagreeing with the Justice Department that the $3.8 billion deal would eliminate a competitor important to price-conscious travelers.
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The Justice Department said JetBlue’s purchase of Spirit would remove an ultra-low-cost carrier that benefits travelers and puts pressure on other airlines to keep down fares.
Removing Spirit as a rival would free JetBlue to raise prices by as much as 30%, the government said. JetBlue is the country’s sixth-largest carrier, and Spirit ranks seventh.
Antitrust enforcers focused during a 17-day trial on how the deal would affect head-to-head competition between JetBlue and Spirit, the impact on routes that Spirit flies today but JetBlue doesn’t, and the markets that Spirit might enter in the future.
- Judge William Young agreed that the proposed deal would substantially lessen competition.
“Spirit is a small airline. But some love it. To those dedicated customers of Spirit, this one’s for you,” he wrote in his decision.
JetBlue had argued it needed the merger to get big enough to compete with the four largest airlines: United, American, Delta and Southwest. A merged JetBlue-Spirit would become the fifth-largest carrier.
