A US federal judge halted JetBlue Airways' USD $3.8 billion acquisition of Spirit Airlines.
The decision sides with the Justice Department's argument that the deal would limit the availability of affordable airfares.
According to The Guardian, the decision by US District Judge William Young in Boston supported the Biden administration's objective to uphold competition among low-cost airlines. Young asserted that the merger violates the "core principle of antitrust law" by jeopardizing market competition.
Young said, "Consumers that rely on Spirit's unique, low-price model would likely be harmed."
In MAR 2023, the US Justice Department filed a lawsuit to stop the deal, representing the first instance where the government intervened to prevent a US airline merger over two decades, CNN reports.
Reports indicate the decision could also affect Alaska Airline’s acquisition of Hawaiian Airlines.
JetBlue and Spirit said in a joint emailed statement to CNN, "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 US carriers."
"We are reviewing the court's decision and are evaluating our next steps as part of the legal process."
As reported by The Associated Press, the ruling was its second major setback in federal court in less than a year. A different judge terminated a Northeast partnership between JetBlue and American Airlines in the same Boston courthouse. JetBlue, the sixth-largest US airline by revenue, must devise a new growth plan, a task that falls to incoming CEO Joanna Geraghty. She will succeed Robin Hayes next month, who orchestrated both blocked deals in court.
The Associated Press wrote that the ruling could prompt Frontier Airlines to explore a fresh attempt to acquire Spirit. In 2022, the two budget carriers revealed a cash-and-stock deal, but JetBlue stepped in with an all-cash offer, ultimately winning a bidding war for Spirit, as Open Jaw reported.
