The antitrust lawsuit trial date has been set to begin on October 16, 2023.
The trial date for the antitrust lawsuit that was set to block the merger of JetBlue Airways and Spirit Airlines has been set for October 16, 2023. The trial is set to be held at the United States District Court of Massachusetts in Boston.
JetBlue Airways and Spirit Airlines acquisition
JetBlue Airways had looked to merge with Spirit Airlines in a $3.8 billion deal. Spirit Airlines agreed to sell itself to JetBlue in the summer of 2022. JetBlue looked at this acquisition as creating a fifth domestic airline based in the United States, that would rival the other big 4 domestic airlines. The 4 domestic airlines, Southwest Airlines, Delta Air Lines, American Airlines, and United Airlines, currently make up around 80% of the aviation market share in the United States.
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Both JetBlue Airways and Spirit Airlines are considered low-fare airlines, although Spirit Airlines offers lower rates. JetBlue looked to take advantage of Spirit Airlines’ fleet of Airbus planes and get access to its array of pilots as well. The airline wanted to remodel the yellow Spirit Airlines planes by removing seats to add more legroom as well as also installing seat back screens.
The United States Department of Justice stepped in shortly after the merger was announced. The Justice Department is suing to block the $3.8 billion acquisition to prevent industry consolidation. The Justice Department released a statement in addition to the complaint, stating,
“JetBlue’s plan would eliminate the unique competition that Spirit provides—and about half of all ultra-low-cost airline seats in the industry—and leave tens of millions of travelers to face higher fares and fewer options. Spirit itself put it simply: ‘A JetBlue acquisition of Spirit will have lasting negative impacts on consumers.'”
The DOJ went on to say that the merger would be harmful to working and middle-class Americans across the country. Many of these travelers rely on low-fare airlines when traveling, and the DOJ believes that the JetBlue acquisition will remove the majority of low-cost flights across the country.
Photo: Vincenzo Pace | Simple Flying
The DOJ also referenced Spirit Airlines’ internal documents in the suit. The documents show that when Spirit Airlines begins flying a specific route, the average fares for that route typically drop up to 17%. Therefore, removing the low-fare option on many routes will allow other airlines to increase their fares and raise the average cost per route. The DOJ believes this acquisition will lead to the removal of over half of the ultra-low-cost airline seats in the United States industry. This would lead to tens of millions of travelers facing higher average fares and fewer options.
JetBlue Airways Chief Executive Officer, Robin Hayes, released a statement in response to the lawsuit, stating,
“We believe the DOJ has got it wrong on the law here and misses the point that this merger will create a national low-fare, a high-quality competitor to the Big Four carriers which – thanks to their own DOJ-approved mergers – control about 80% of the U.S. market. Together, we intend to democratize flying for travelers across the country – a goal we believe is worthy of the government’s support.”
In addition to the DOJ’s lawsuit against the merger, JetBlue Airways is awaiting a separate ruling on its proposed partnership with American Airlines in the Northeast United States.