Judge Blocks JetBlue From Acquiring Spirit Airlines

A federal judge on Tuesday blocked JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines, a victory for the Department of Justice, which argued that the deal would harm travelers.

In his 109-page ruling, Judge William G. Young of the U.S. District Court for the District of Massachusetts sided with the Justice Department in determining that the merger would reduce competition in the airline business.

The proposed merger would have created the nation’s fifth-largest airline. The Justice Department argued that smaller, low-cost airlines like Spirit helped reduce fares and that allowing the company to be acquired by JetBlue, which tends to charge higher prices than Spirit, would have hurt consumers.

The four largest U.S. airlines — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines — control about two-thirds of the market. The merger would have given JetBlue a market share of 10 percent, still shy of United, the fourth-largest U.S. airline, which has 16 percent.

Lawyers for JetBlue argued in court last month that the merger would allow it to better compete with the four large national airlines, bringing prices down overall. The Justice Department argued that a larger JetBlue would act just like its bigger competitors while taking away a low-cost option for travelers.

Analysis presented at trial showed that when Spirit introduces a new route, fares, including those on JetBlue flights, come down. JetBlue planned to reconfigure tightly packed Spirit airplanes to match its own roomier layout, meaning it would reduce the number of seats.

Judge Young agreed with the government, ruling on Tuesday that the merger would “likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier.” He said Spirit played an important role in the market as a small, low-cost alternative to large airlines.

“Spirit is a small airline,” he said in the ruling. “But there are those who love it. To those dedicated customers of Spirit, this one’s for you.”

President Biden hailed the ruling as a win for consumers in a post on the social media site X and said that his administration would aggressively enforce antitrust laws. “Capitalism without competition isn’t capitalism — it’s exploitation,” he said. “Today’s ruling is a victory for consumers everywhere who want lower prices and more choices.”

Spirit’s share price tumbled 47 percent by Tuesday afternoon following the news, while JetBlue’s…