Future of JetBlue-Spirit Merger Now in Judge’s Hands

Reuters reports the merger may still go through, with certain concessions from JetBlue.

Door Open on Merger with Potentially More Divestures

The bidding war for Spirit Airlines ended in mid-2022, after JetBlue outbid Frontier Airlines. But once the federal government sued JetBlue and American Airlines over their Northeast Alliance, it was all but certain the Spirit Airlines merger would go under extra scrutiny.

During the trial lasting over a month, leaked documents allegedly suggested prices on routes serviced by Spirit could increase by as much as 40% once the merger was complete, which ended up being a key argument by the Justice Department. JetBlue argued that consolidating the two airlines would increase competition by providing more options for flyers in underserved communities.

During the closing arguments phase, Judge William Young expressed he had “trouble” blocking the merger outright, considering the challenges aviation has faced in the post-COVID era. The judge noted that similar deals could have worked “if there were this divesture or that divesture.” JetBlue has already agreed to divest slots in Boston and Newark to Allegiant Air.

Federal attorneys argued during questioning that there could be no path forward but a “full-stop injunction that would restore competition.” In return, lawyers for JetBlue noted that the New York-based airline and Spirit only account for 8% of the current marketplace, suggesting a merger would create another national airline to put pressure on the “legacy three” airlines.

Judge Young told both sides that his questioning did not indicate how he would ultimately rule, and the case currently remains unresolved. It is unclear when a decision can be expected in the case.

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Feature image courtesy: JTOcchialini/Flickr/CC BY-SA 2.0