Key takeaways:
- The U.S. Department of Justice has filed a lawsuit to block JetBlue’s proposed $3.8 billion acquisition of Spirit Airlines.
- The Justice Department’s decision is a test of President Joe Biden’s aggressive antitrust strategy.
- The merger has been met with opposition from consumer advocacy groups, who argue that the deal would reduce competition and lead to higher prices for consumers.
The U.S. Department of Justice has filed a lawsuit to block JetBlue’s proposed $3.8 billion acquisition of Spirit Airlines, a move that would create the fifth-largest carrier in the U.S. and represent the largest airline industry merger since Alaska Air bought Virgin America in 2016 for $2.6 billion.
The Justice Department’s decision to challenge the merger is a test of President Joe Biden’s aggressive antitrust strategy, which seeks to reverse 40 years of corporate concentration. The Transportation Department is also expected to deny a transfer of Spirit’s airline certificate, arguing that doing so would be against the public interest.
JetBlue CEO Robin Hayes expressed disappointment but not surprise at the government’s determination to challenge the transaction in court. “We said when we got the offer approved by the Spirit shareholders last year that we didn’t think we would close ’til the first half of 2024, you know, expecting a trial,” Hayes told CBS Mornings on Tuesday.
The merger, which was announced in July 2022, has been met with opposition from consumer advocacy groups, who argue that the deal would reduce competition and lead to higher prices for consumers. The Justice Department’s lawsuit will now be heard in court, where the parties will present their arguments and a judge will decide whether to approve or reject the merger.
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