JetBlue and Spirit announced Friday that they will appeal a judge’s ruling that blocked their merger agreement over antitrust concerns.
The airlines jointly appealed the court’s decision, “consistent with the requirements of the merger agreement.” Both airlines have expressed their disagreement with the court’s ruling of the merger deal earlier last week.
The proposed $3.8 billion deal, which would have integrated Spirit into the JetBlue brand, was nixed by a U.S. District Court judge in Boston following a trial last fall in which the airlines argued with federal regulators over the legality of the proposed merger. The judge said the deal would increase fares and harm price-sensitive consumers.
“JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers,” U.S. District Court Judge William Young wrote. “The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
The decision represents a major win for the U.S. Justice Department, which sued to halt the agreement in March 2023 over antitrust concerns. Federal regulators have been particularly vigilant about enforcing antitrust laws under President Joe Biden.
“Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward,” Attorney General Merrick Garland said in a statement. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers.”
The airlines disagreed, saying the merger will bring greater competition to the larger legacy carriers.
“We continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers,” the airlines said in a joint statement.
JetBlue and Spirit aircraft at Pittsburgh International Airport on Dec. 9, 2023. (Photo by Evan Dougherty)
JetBlue’s deal was approved by Spirit’s shareholders in October 2022 following an aggressive bidding war with Frontier Airlines to acquire Spirit. JetBlue’s all-cash bid came after Frontier’s $2.4 billion stock-and-cash proposal was first announced in February of that year.
JetBlue and Spirit argued that the deal would enable the combined carrier to grow quicker nationwide as the industry grapples with pilot shortages and aircraft delivery constraints stemming from supply chain backups.
Additionally, JetBlue CEO Robin Hayes has said the combined carrier would challenge the industry’s “big four” airlines — American, Delta, United and Southwest — with a “low-fare high-quality airline to compete on a more national scale.”
JetBlue announced plans to retrofit Spirit aircraft to its specifications, which include more legroom and amenities, and to reduce the number of seats on each plane.
The DOJ sued to block the merger agreement last March, stating that the deal would create a negative effect on competition and a loss in capacity for ultra-low-cost travel, harming consumers nationwide.
“Fewer seats means fewer passengers — and higher prices for those who can still afford to make their way onto the plane,” the Justice Department’s complaint said.
Massachusetts, New York and Washington, D.C., also joined the Justice Department’s complaint to stop the merger.
The ruling marks the second time the Justice Department has prevailed over JetBlue in recent antitrust trials. Last year, a different U.S. District Court judge sided with the DOJ to block JetBlue’s Northeast Alliance joint venture with American Airlines, a deal that enabled both airlines to codeshare on select routes and coordinate schedules.
JetBlue currently operates daily flights between Pittsburgh and Boston. JetBlue entered the Pittsburgh market in 2006 as one of the first low-cost carriers to start service at PIT since the airport’s transition to an origin-and-destination airport.
Spirit, meanwhile, began service at PIT in 2017 and has grown to become the airport’s fifth-largest carrier by total passengers flown. Spirit currently operates nonstop service between PIT and nine destinations: Fort Lauderdale, Fort Myers, Las Vegas, Los Angeles, Miami, Myrtle Beach, Newark, Orlando and Tampa.