Federal antitrust authorities are preparing to file a lawsuit to block JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines.
The deal, announced in July 2022 after JetBlue beat a competing bid for Spirit from Frontier Airlines, would create the fifth-biggest airline in the US
Attorneys for the US Department of Justice could stop the transaction as early as Tuesday, CBS News confirmed.
A spokesman for the agency declined to comment.
Robin Hayes, CEO of New York-based JetBlue, said the airline was disappointed but not surprised by the possible government lawsuit.
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“When we got the offer approved by Spirit shareholders last year, we said we didn’t expect to close until the first half of 2024, you know, pending a trial,” he said Tuesday to CBS Mornings.
JetBlue is expected to fight a Justice Department lawsuit in court.
Hayes said the combination of JetBlue and Spirit, a Florida-based low-cost airline, would boost competition in the airline industry. In defense of the merger, JetBlue said Monday that the two airlines primarily compete with other major airlines, most notably American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. JetBlue and Spirit overlap on no more than 11% of their respective non-stop routes, according to JetBlue.
How the $3.8 billion merger of Spirit Airlines and JetBlue could impact budget travel
The combined airline would have a fleet of about 460 planes and add more than 1,700 daily flights to more than 125 destinations in 30 countries, JetBlue said last year. Combined, the companies would have a 9% market share, compared to the 16% to 24% held by each of the top four airlines, JetBlue added.
“This isn’t Pepsi buying Coke,” Hayes said, adding that “JetBlue and Spirit together will account for 8% or 9% of the US air travel market.” fly. That’s where you’ll save the really big bucks – by having a bigger JetBlue.”
JetBlue’s purchase of the Spirit has also met resistance from other quarters. A coalition of consumers and flight attendants sued in November to stop the deal, arguing that the combined airline would dominate certain routes, according to Bloomberg Law.
The Justice Department, along with six states and the District of Columbia, sued in 2021 to prevent JetBlue and American from consolidating their operations in Boston and New York City, arguing that it would hurt competition.
CBS News’ Jeff Pegues and Analisa Novak contributed to this report.
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Alain Scherter