Deal to Create Fifth-Biggest Airline Is Blocked by Judge

UPDATE Jan 16, 2024 12:40 PM CST

The Justice Department scored a big win on air travel Tuesday when a federal judge blocked JetBlue's planned purchase of Spirit Airlines, reports CNBC. Judge William Young in Boston put the kibosh on the $3.8 billion acquisition, which would have created the nation's fifth-biggest airline. The Justice Department had sued to stop the proposed deal, warning that it could significantly drive up air fares. Young agreed. No word yet from JetBlue on next steps. Spirit is the nation's largest low-budget airline, per the AP.

Aug 25, 2023 12:27 PM CDT

JetBlue Airways could raise fares on some routes by up to 40% if it succeeds in buying Spirit Airlines and eliminating the low-fare carrier as a competitor on those routes, according to lawyers who are suing the airline to block the deal. The estimations were contained in court filings made earlier this week, and which JetBlue says were not properly redacted, per the AP. JetBlue said Thursday that the filings are based on the opposition lawyers' interpretation of evidence, and are taking facts out of context. Consumer advocates jumped on the news, saying that the accidental disclosure supports the Justice Department's antitrust lawsuit aiming to block JetBlue's $3.8 billion purchase of Spirit, the nation's largest discount airline.

Even before the government lawsuit, lawyers for about two dozen consumers sued JetBlue and Spirit last November in US district court in Boston, claiming that the merger would reduce competition and lead to higher prices. Documents filed Tuesday by the consumers' lawyers included redactions, but were done in a way that made it possible to see the hidden information by copying and pasting the text into a new document. The claims were first reported by Law360, which covers legal news. Law360 told USA Today that the documents are no longer posted publicly. The documents could undercut JetBlue's argument that consumers would benefit from the merger because the combined airline would be better able to compete against giants like American, Delta and United.

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In a statement Thursday, New York-based JetBlue said lawyers for the consumers "failed to properly redact certain information which, taken out of context, creates a completely inaccurate picture of the facts. We are confident that our merger with Spirit will give a much-needed boost to airline competition in the US and result in more low fares and higher-quality service for customers." Consumer advocates who oppose the JetBlue-Spirit deal said the disclosures support their argument. "Those of us who have been warning that a JetBlue-Spirit merger would raise fares and stifle competition can now cite an unimpeachable source—JetBlue itself," said William J. McGee, an aviation expert at the American Economic Liberties Project, which lobbies against industry consolidation. (More JetBlue stories.)