Court Blocks JetBlue/Spirit Deal

A federal judge in Massachusetts has blocked JetBlue Airways’ $3.8 billion purchase of Spirit Airlines, finding the deal would fly in the face of the spirit of antitrust law. Attorney General Garland hailed the ruling as a victory for travelers who would have confronted higher rates and fewer travel choices had the deal been consummated.

The court’s decision followed a 17-day trial that began in October 2023. In March 2023, the Justice Department, California, Maryland, Massachusetts, New, Jersey, New York, North Carolina, and the District of Columbia sued to stop the merger under Section 7 of the Clayton Act.

This marks a rejection of another effort by JetBlue to strengthen its position in the airline industry. Last year a federal judge permanently enjoined American Airlines and JetBlue from continuing their Northeast Alliance, in which the judge said the pair acted as one company, replacing “full-throated competition” with “broad coordination” of business in and out of Boston and New York. That coordination included trading information on which routes to fly, which company will fly them, and the seating capacity needed to accommodate passengers.  After several weeks of trial, the court concluded that the pact plainly violated Section 1 of the Sherman Act. The carriers illegally allocated the market between themselves, and failed to produce evidence of any of the procompetitive effects they claimed justified the arrangement, the court determined.

Read Jonathan Rubin’s comments on that case.

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Edited by Tom Hagy. Photo by Lukas Souza on Unsplash

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