US Justice Department Sues To Block JetBlue's $3.8B Spirit Airlines Deal - JetBlue Airways (NASDAQ:JBLU)

The Justice Department has reportedly sued to block JetBlue Airways Corporation (NASDAQ:JBLU) and Spirit Airlines Incorporated (NYSE:SAVE), the Biden administration's latest attempt to prevent industry consolidation.
The complaint said JetBlue planned to remove 10% to 15% of seats from every Spirit plane, Reuters added.
"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," the Justice Department said in its complaint, filed in a Massachusetts court on Tuesday. "Spirit itself put it simply: 'A JetBlue acquisition of Spirit will have lasting negative impacts on consumers.'"
JetBlue has argued that the combination would allow it to better compete with large airlines that dominate the U.S. market.
"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," the DOJ said, CNBC reported.
New York, Massachusetts, and Washington, D.C., also joined the suit.
After several travel disruptions over the past two years, the Biden administration has also aimed at the airline industry, even after carriers received $54 billion in payroll aid to weather the Covid pandemic.
If the deal closes, it would be the largest airline industry merger since Alaska Air bought Virgin America in 2016 for $2.6 billion.
Price Action: JBLU shares are down 0.36% at $8.37, and SAVE shares are up 4.58% at $17.14 on the last check Tuesday.
Photo via Wikimedia Commons

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