The proposed takeover of Spirit Airlines by JetBlue Airways is facing increasing opposition as four US states have decided to support the Department of Justice’s lawsuit against the acquisition.
California, Maryland, New Jersey, and North Carolina joined the lawsuit on Friday, which was initially filed by the Justice Department on March 7. JetBlue Airways intends to purchase its rival carrier, Spirit Airlines, for $3.8 billion.
DOJ lawsuit against the takeover deal
The Department of Justice filed an antitrust lawsuit in March, contending that the proposed takeover would have negative consequences for consumers, including higher fares and fewer seat options.
The DOJ claims that merging the low-cost airline rivals would result in increased ticket prices and fewer choices for travelers. Critics are also concerned that the acquisition of Spirit Airlines by JetBlue Airways will damage competition within the airline industry.
The DOJ claims that the proposed acquisition of Spirit by JetBlue would eradicate the “Spirit Effect,” a phenomenon in which Spirit’s presence in a market prompts other airlines, including JetBlue, to reduce their fares.
Furthermore, the acquisition would eliminate fifty percent of the ultra-low-cost capacity in the United States.
States oppose the takeover deal
As California, Maryland, New Jersey, and North Carolina join the legal battle against the proposed takeover, government opposition to the acquisition is on the rise. Previously, Massachusetts, New York, and the District of Columbia had also joined the Department of Justice’s lawsuit.
Four Additional States Join Justice Department’s Suit to Block JetBlue’s Acquisition of Spirit Airlines https://t.co/TVwvQPkim1
— Antitrust Division (@JusticeATR) March 31, 2023
In a statement, Doha Mekki, the Principal Deputy Assistant Attorney General at the DOJ, expressed her enthusiasm for litigating this significant case with state law enforcement allies to prevent JetBlue from eliminating its competitor, Spirit.
Thus far, neither Spirit Airlines nor JetBlue Airways has provided any commentary or declarations regarding the most recent developments.
Spirit Airlines and JetBlue CEOs Oppose DOJ Lawsuit
JetBlue CEO Robin Hayes believes the DOJ has it wrong and the merger will create a national low-fare competitor to the Big Four carriers. In a statement few days ago, CEO said that the company intends to pursue the merger to ensure customers receive competitive pricing and high-quality service.
Spirit CEO Ted Christie said that he disagrees with the DOJ and will vigorously defend the position that the merger benefits consumers and employees, creating a strong national low-fare challenger. Both CEOs believe the merger is a game-changer for customers across the country.
