The Justice Department has filed a lawsuit to block JetBlue from acquiring Spirit Airlines, the latest attempt by the Biden administration to prevent consolidation in the airline industry.
The $3.8 billion acquisiton of low-cost carrier Spirit would create the fifth-largest airline in the U.S. The airline agreed to sell itself to JetBlue last year after a deal with Frontier Airlines fell through.
The complaint, filed Tuesday in a Massachusetts court, alleges that the acquisition would reduce options for travelers, raise ticket prices and lessen competition in the industry.
“Spirit’s ultra-low-cost business model has increased competition and brought low fares to hundreds of routes across the country, making it possible for more Americans — particularly the most cost conscious — to travel,” the complaint reads. “JetBlue competes hard against Spirit, and views it as a serious competitive threat. But instead of continuing that competition, JetBlue now proposes an acquisition that Spirit describes as ’a high-cost, high-fare airline buying a low-cost, low-fare airline.”
In a statement released Monday ahead of the DOJ’s filing, JetBlue contended that its acuisition of Spirit would actually lower costs for customers.
“JetBlue’s unique combination of low fares and great service is a competitive force that keeps the legacy carriers on their toes and results in lower fares,” the company said Monday, contending that it was three times more effective bringing down competitors’ fares than Spirit.
“The Big Four airlines have a lock on about 80% of the market,” JetBlue added. “JetBlue’s combination with Spirit allows it to create a compelling national challenger to these dominant airlines, while also ensuring [ultra low-cost carrier] options remain available in overlap markets”
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