Justice Department sues to block JetBlue's acquisition of Spirit Airlines
Source: CNBC
The Justice Department on Tuesday sued to block JetBlue Airways’ $3.8 billion proposed takeover of budget carrier Spirit Airlines, the Biden administration’s latest attempt to prevent industry consolidation. New York-based JetBlue’s acquisition of Spirit faced a high hurdle with regulators from the start, and the airline on Monday said it expected “a high likelihood of a complaint from DOJ this week.”
JetBlue’s takeover of Spirit would create the fifth-largest airline in the country and also eliminate Spirit. The Florida-based budget airline has a business model that rests on offering rock-bottom fares and fees for everything from carry-on baggage to seat assignments. JetBlue has argued the combination would allow it to better compete with large airlines that dominate the U.S. market.
The deal would also give JetBlue access to more Airbus jetliners and pilots, which are both in short supply as travel demand remains strong. JetBlue plans to remodel Spirit’s bright-yellow planes with packed-in seats to JetBlue’s, which include seat-back screens and more legroom.
A JetBlue-Spirit combination would be the first major U.S. airline merger since Alaska Airlines’ takeover of Virgin America in 2016. The Justice Department at the time required Alaska to scale back its code share with American Airlines to clear the deal. The Justice Department also sued to block American Airlines’ 2013 merger with US Airways but settled, forcing American to sell dozens of gates and slots at congested airports like Washington Reagan National Airport.
Read more: https://www.cnbc.com/2023/03/07/doj-jetblue-spirit-airlines.html
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