Jet Blue blocked from Spirit acquisition by US Dept of Justice
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. The DoJ move puzzles me; can any of you provide some context for this? |
DoJ apparently believes that this acquisition will remove Spirit as a competitor in the low-cost / ultra low cost airline market and thus restrain trade in interstate commerce in violation of the Sherman Antitrust Act. I do not believe that staving off a possible bankruptcy allows relief from that.
It's not like JetBlue is swimming in money either. In 2022 JetBlue reported losses of $280 million on revenues of $9,150 million. Spirit reported losses for 2022 of $60 million on revenues of $5,060 million. |
While I can certainly understand the concern that it'll reduce competition and hence increase prices, I can't help but think that blocking the merger may be self defeating. If one or both of the airlines in question go under, the impact on competition and prices will be even greater.
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Originally Posted by tdracer
(Post 11397782)
I can't help but think that blocking the merger may be self defeating. If one or both of the airlines in question go under, the impact on competition and prices will be even greater.
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