US sues to stop JetBlue's deal for Spirit, cites consumer harm | Reuters
The U.S. Justice Department filed a lawsuit on Tuesday to stop JetBlue Airways Corp
(JBLU.O) from buying Spirit Airlines Inc
(SAVE.N), saying the planned $3.8 billion merger "would put travel out of reach for many cost-conscious travelers." The complaint, which was filed in Boston federal court, said that JetBlue planned to remove 10% to 15% of seats from every Spirit plane.
"Fewer seats means fewer passengers - and higher prices for those who can still afford to make their way onto the plane. This is unlikely to stop business travelers flying on corporate expense accounts, but would put travel out of reach for many cost-conscious travelers," the complaint said.
I don't know enough about Spirit's financials to comment in depth, but I am willing to guess that their projections are not rosy for future profitability, so they (the ownership / stockholders /etc) chose to sell rather than slowly go under. If that estimate is off base, I'd like to learn a better assessment.
The DoJ move puzzles me; can any of you provide some context for this?