Spirit Airlines expects US antitrust regulators to decide whether to allow the low-cost carrier to proceed with its $3.8 billion merger with JetBlue Airways in March.
American is the largest airline in the world. Just four airlines — American, along with Delta, United and Southwest — collectively control over 80% of domestic air travel. According to the complaint, American has relentlessly pursued a strategy of industry consolidation in the United States and around the world. Unable to combine with foreign airlines through formal mergers, American has instead pursued consolidation through a series of international joint ventures.
The complaint alleges that JetBlue’s CEO stated, “it may look as if a dozen or more airlines [are] providing service. But when you go under the surface, it’s really just three big mega-alliances controlling 87% of the traffic…Consumers effectively have very little choice in markets where JVs have a stranglehold – and they also face higher fares.” The Justice Department alleges that American now seeks to import this strategy to domestic air travel.
Concerns about approval for the combined airline was amplified after the DOJ filed a lawsuit last year asking a judge to break up JetBlue’s “Northeast Alliance” partnership with American Airlines, arguing it would lead to higher fares for consumers.