The U.S. Department of Transportation supports the Justice Department blocking the proposed JetBlue-Spirit merger.
The DOT cited its concerns that the merger would eliminate the largest ultra-low-cost competitor, reduce competition and potentially harm consumers, according to a March 7 DOT news release. The DOT will continue its investigation of the transfer while prioritizing consumer protection and promoting competition in the aviation industry.
"Americans deserve robust competition & affordable airfares. USDOT supports DOJ's antitrust lawsuit & we plan to deny the JetBlue-Spirit request for an exemption on their merger deal. We will continue with our own investigation while supporting DOJ's work," Transportation Secretary Pete Buttigieg said in a post on Twitter.
The Justice Department, along with attorneys general from Massachusetts, New York and Washington D.C., filed a lawsuit to block JetBlue's proposed $3.8 billion acquisition of Spirit Airlines, according to a DOJ news release. The complaint alleges the acquisition would eliminate Spirit's low-cost option and the "Spirit Effect," leading to higher fares and fewer choices for travelers.
This would harm cost-conscious fliers most acutely, and the acquisition would also increase fares and reduce choice on routes across the country, the DOJ release reported. The complaint seeks to block the acquisition under Section 7 of the Clayton Act.
"JetBlue's proposed acquisition of Spirit eliminates a disruptive, low-cost option for millions of Americans," Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department's Antitrust Division said in the release. "Whether they fly Spirit or not, travelers throughout the United States benefit from an independent Spirit because where Spirit competes, other airlines – including JetBlue – are forced to compete more vigorously by lowering fares, offering greater innovations and delivering more consumer choice."
JetBlue released a breakdown demonstrating the pro-competitive benefits of its proposed acquisition of Spirit Airlines in a March 6 release. The analysis argues the combination of the two airlines will lead to lower fares, more choices and improved customer service. It also claims that the transaction will increase capacity, create jobs, and boost competition in the airline industry.
JetBlue asserts the Department of Justice's lawsuit to block the acquisition is based on a flawed analysis, and the agency needs to consider the benefits of the merger adequately, according to its release.
JetBlue and Spirit also revealed they will continue to advance their plan to create a low-cost airline in the United States, despite the Justice Department filing a lawsuit to block JetBlue's proposed acquisition of Spirit, according to a March 7 release. The two airlines believe combining their networks and assets will create a compelling national low-fare challenger to the dominant carriers in the U.S. market.
They also said they will defend against the antitrust lawsuit and seek to demonstrate the pro-competitive benefits of their proposed combination, the release reported.
