The Department of Justice said it would try to block JetBlue’s proposed $3.8 billion acquisition of Spirit Airlines, launching a lawsuit to stave off further consolidation of the airline industry.
The merger that would have created the fifth-largest airline in the U.S., but the move to block it marks a sharp turn from past precedent in which the government has approved mergers such as American-US Airways, United-Continental, Delta-Northwest and Southwest-AirTran.
JetBlue and Spirit argued that they needed to merge in order to compete against the four largest U.S. airlines — Delta Air Lines, American, United and Southwest Airlines — which already dominate about 80% of the U.S. market.
However, the DOJ didn’t buy the argument.
The DOJ said it believed that a merger between JetBlue and Spirit would ultimately cause fares to increase, since a combined airline would have fewer seats and wouldn’t be able to fully recover from its losses without charging more for airfare.
President Joe Biden’s administration has adopted a hawkish stance on antitrust laws, with the DOJ aggressively suing to block mergers between major companies. For example, a judge blocked a merger between publishing giants Simon and Schuster and Penguin Random House after the DOJ filed a lawsuit. The DOJ is also planning to sue Adobe and Figma over their $20 billion merger.
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The DOJ is currently attempting to hamper a partnership between JetBlue and American Airlines in Boston and New York, known as the Northeast Alliance. A decision on that partnership is also expected to be released in the near future.
This is a breaking news story. Stay tuned for more updates.
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