Competition Reinforced in Low Cost Carrier Market

An expected merger between JetBlue Airways and Spirit Airlines will not be happening, thanks to Massachusetts District Judge William Young snuffing it out in court.

The $3.8 billion acquisition would have seen JetBlue gobble up Spirit, but it was found unlawful as it "does violence to the core principle of antitrust law: to protect the United States' markets - and its market participants - from anticompetitive harm."

Young said that the resulting airline would "substantially lessen competition" in the low-cost carrier market. The news cratered Spirit Airlines stock, dropping it nearly 50%. JetBlue saw a mild raise of about 5%. The court decision was the result of a 17-day, jury-free trial that began when a handful of states sued to stop the merger under Section 7 of the Clayton Act.

“Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward,” said Attorney General Merrick B. Garland. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers. I want to thank the Antitrust Division for their excellent work on this case.”

“The Court’s decision today reaffirms that the antitrust laws vindicate the economic liberty of the American people,” said Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “We are particularly encouraged by the court’s acknowledgment of the role of the Justice Department in protecting consumers ‘who otherwise would have no voice’ and the ‘forthrightness, civility, and zealous advocacy’ that ‘assisted the Court in reaching out for justice.’ I am incredibly proud of the Antitrust Division’s staff and our state law enforcement partners whose tireless work ensured another airline merger would not harm American travelers.”

FMI: www.justice.gov