Spirit Airlines And Jetblue Terminate Their Merger Plans

(DailyDig.com) – On March 4, Spirit Airlines and JetBlue Airways announced the termination of the merger agreement they had made in 2022. The announcement came after the federal judge in the antitrust lawsuit by the Department of Justice (DOJ) blocked the merger in January this year.

When JetBlue appealed the ruling, the Appeals Court in Boston agreed to take on the case. However, the regulatory approvals that were needed for the merger to be approved were not likely to happen prior to their July 2024 deadline, according to JetBlue’s statement. Joanna Geraghty, CEO of JetBlue, said that they thought the merger was needed to compete with four of the big airlines in low-cost, high-value service. Due to the ruling, she said that they will still try to compete as an individual airline.

Ted Christie, CEO of Spirit Airlines, said that they were disappointed in the ruling as it would have given their customers savings as they challenged the current dominant airlines.

William Young, the US District Judge, stated in his ruling that the merger would lessen competition in the airline industry. This would violate the Clayton Act, which was meant to prevent harm to customers if competition in pricing and value were lessened or eliminated.

He added that by buying up Spirit, which is the largest low-cost airline in the nation, JetBlue would have increased prices for customers who count on the lower airfare. Merrick Garland, Attorney General, stated last year when the lawsuit was filed that merging the two airlines would reduce choices of airlines and raise pricing for tickets for customers.

JetBlue’s plan to acquire Spirit Airlines would have given Spirit the boost they needed, as they are struggling due to the grounding of many of their Airbus aircraft because of an engine defect from Pratt & Whitney. Now, with the merger not happening, Spirit will deal with their financial issues, which their officers state they are able to accomplish. Compensation by Pratt & Whitney for the flaw in their engines is also expected by Spirit.