JetBlue Says It Is Halting Spirit Merger After Fed Crackdown
A federal judge had blocked the merger over antitrust concerns.
Reuters/Dado Ruvic
JetBlue Airways announced Monday that it’s ditched a plan to merge with Spirit Airlines—a transaction that would have made the combined airline the fifth largest in the nation.
In a statement, JetBlue indicated that the sale was being called off because a federal judge had blocked it over antitrust concerns that led to a series of costly legal hurdles—not because it didn’t believe the merger was good for business.
“Although both companies continue to believe in the pro-competitive benefits of the combination, JetBlue and Spirit mutually agreed that terminating is the best path forward for both companies,” JetBlue’s statement read.
It’s unclear what the merger means for Spirit, which has reportedly been on life-support in the aftermath of the COVID-19 pandemic.
JetBlue CEO Joanna Geraghty said the merger, worth $3.8 billion, would have “unleashed a national low-fare, high-value competitor to the Big Four airlines.” The feds had countered that allowing the merger would eliminate low fares nationwide previously offered by Spirit, hurting consumers.
Spirit CEO Scott Haralson said he was disappointed the deal fell through.
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“We are disappointed we cannot move forward with a deal that would save hundreds of millions for consumers and create a real challenger to the dominant ‘Big 4’ U.S. airlines,” he said in a statement. “However, we remain confident in our future as a successful independent airline.”
The merger was announced in July 2022, just as a similar merger, between Spirit and Frontier Airlines, fell apart for the same reasons.
U.S. District Court Judge William Young blocked the merger in January after siding with an antitrust claim filed by the Department of Justice. He wrote in a motion that the “elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
The airlines immediately appealed the ruling, but the process of overcoming Young’s decision was just too much, Geraghty said. In a note sent to staff about the merger being called off, she insisted JetBlue was in the right to try and purchase Spirit.
“We were right to compete with Frontier and go for an opportunity that would have supercharged our growth and provided more opportunities for crewmembers,” she said. “However, with the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low.”
In a statement of its own, the DOJ celebrated the merger being called off.
“Today’s decision by JetBlue is yet another victory for the Justice Department’s work on behalf of American consumers,” said Attorney General Merrick B. Garland. “The Justice Department proved in court that a merger between JetBlue and Spirit would have caused tens of millions of travelers to face higher fares and fewer choices. We will continue to vigorously enforce the nation’s antitrust laws.”
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