The US Department of Justice (DOJ) Tuesday filed a civil antitrust complaint to block JetBlue’s proposed $3.8 billion acquisition of Spirit Airlines. The DOJ’s complaint alleged that JetBlue’s acquisition will negatively impact millions of consumers. While Spirit is known for offering low airfare for its customers, the DOJ stated, “JetBlue plans to abandon Spirit’s business model, remove seats from Spirit’s planes, and charge Spirit’s customers higher prices.”
JetBlue and Spirit responded to the DOJ’s complaint and reiterated their confidence that this proposed acquisition is pro-competitive, not anti-competitive. Both JetBlue and Spirit stated that this proposed merger will “create a compelling national challenger to the Big Four airlines,” which are American Airlines, Delta Airlines, Southwest Airlines and United Airlines. The Big Four airlines currently control approximately 80 percent of the market after the DOJ previously approved consolidation within the airline industry.
Both JetBlue’s CEO Robin Hayes and Spirit’s CEO Ted Christie expressed their disagreement with the DOJ’s decision to file the antitrust lawsuit and reiterated the proposed merger’s pro-competitiveness and benefit for both employees and customers.
Prior to the DOJ’s filing, on Monday JetBlue released an updated economic analysis in order to demonstrate the pro-competitive benefits of its proposed acquisition of Spirit. JetBlue’s economic analysis concluded that JetBlue is, on average, “over 3x as effective at lowering legacy carrier nonstop fares than Spirit.” Since JetBlue and Spirit primarily compete with other airlines and not each other, JetBlue does not believe competition will be decreased. Additionally, JetBlue argued that its proposed acquisition of Spirit “will create a more competitive environment and ongoing access for the most price-sensitive customers.”