The Biden administration, with an help from Massachusetts AG Andrea Campbell’s workplace, is suing to dam JetBlue Airways’ $3.8 billion buy of Spirit Airlines, saying Tuesday that the deal would scale back competitors and drive up air fares.
“If allowed to proceed, this merger will limit choices and drive up ticket prices for passengers across the country” and “eliminate Spirit’s unique and disruptive role in the industry,” mentioned U.S. Attorney General Merrick Garland.
The Justice Department mentioned the tie-up would particularly harm cost-conscious vacationers who depend upon Spirit to seek out cheaper choices than they’ll discover on JetBlue and different airways.
Campbell, for her half, identified that JetBlue is a key participant at Boston’s Logan Airport and that Spirit Airways maintains a presence there, too. Both airways, she mentioned, serve the Caribbean and Latin America, amongst different locations. Eliminating Spirit Airlines available in the market would scale back competitors in opposition to all the remaining airways, not simply with JetBlue, she mentioned.
“When airlines compete on price, quality and innovative services, consumers benefit,” Campbell mentioned. “Consumers should have a wide range of affordable air travel options.”
JetBlue and Spirit have anticipated a authorized problem for weeks. The Justice Department had beforehand requested further paperwork and depositions about JetBlue’s proposal to purchase Spirit, the nation’s greatest price range airline. Negotiations over a attainable settlement failed.
JetBlue CEO Robin Hayes mentioned Tuesday that he was disenchanted however not shocked by the motion.
“We said when we got the offer approved by the Spirit shareholders last year that we didn’t think we would close until the first half of 2024, expecting a trial,” he mentioned on “CBS Mornings.”
JetBlue and Spirit collectively would management slightly over 9% of the home air-travel market, far smaller than American, Delta, United and Southwest. JetBlue executives repeatedly mentioned their deal was not like Pepsi shopping for Coca-Cola — a line that Hayes repeated Tuesday.
But the Justice Department lawsuit, filed in federal district court docket in Boston, harassed that the deal would imply the top of the nation’s greatest “ultra-low-cost carrier.” Those are airways that usually present the most affordable fares but in addition are inclined to cost extra charges.
Department attorneys mentioned Spirit’s demise would eradicate about half of all ultra-low-cost seats available in the market.
The Justice Department sued to dam the final megadeal, American’s merger with US Airways, then reached a settlement that required the carriers to surrender some gates and takeoff and touchdown slots at a number of main airports. Before that, the federal government allowed Delta to purchase Northwest, United to merge with Continental, and it later let Southwest purchase AirTran.
Last yr, JetBlue torpedoed a deal between Spirit and Frontier Airlines, then beat Frontier in a bidding conflict. Frontier CEO Barry Biffle argued that regulators would block a JetBlue-Spirit deal however not a tie-up along with his airline, the same low cost provider.
The largest union for flight attendants, the Association of Flight Attendants, reiterated its help for the merger Tuesday, which it mentioned would raise pay and advantages for Spirit crews that it represents.
Source: www.bostonherald.com”