On Tuesday the US Justice Department submitted a filing challenging JetBlue Airways Corp.’s $3.8 billion acquisition of Spirit Airlines.
According to Bloomberg the DOJ is concerned the combination would lead to higher prices for consumers by eliminating Spirit which is known for discounts. Also reported was that New York, Massachusetts and Washington, DC joined in the antitrust suit.
“If the acquisition is approved, JetBlue plans to abandon Spirit’s business model, remove seats from Spirit’s planes, and charge Spirit’s customers higher prices,” the Justice Department said in its complaint. “JetBlue’s plan would eliminate the unique competition that Spirit provides — and about half of all ultra-low-cost airline seats in the industry — and leave tens of millions of travelers to face higher fares and fewer options.”
In a separate suit the Department of Transportation is expected to block Spirit’s airline certificate transfer after determining the merger isn’t consistent with the public interest, according to people familiar with the case, who spoke anonymously to discuss an ongoing matter.
The tie-up would make JetBlue the fifth-largest US carrier based on domestic passenger traffic, giving it a broader network and the size to lure passengers away from larger competitors with lower fares and better onboard service.