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JetBlue has announced asset sales to Allegiant in an effort to secure regulatory approval for its acquisition of Spirit Airlines.
On Monday, JetBlue revealed plans to sell off a range of Spirit Airlines’ assets to Allegiant to obtain approval for its merger with Spirit. This includes the transfer of two gates each at Boston and Newark Liberty airports, along with 43 takeoff and landing slots at the Newark facility. In addition, the company will hand over up to five gates at Fort Lauderdale-Hollywood International Airport to the Broward County Aviation Department, allowing Allegiant’s expansion at this location.
The sale comes amidst a legal challenge from the Justice Department and several state attorneys general, who initiated a lawsuit in March to halt JetBlue’s $3.8 billion purchase of Spirit. The plaintiffs argue that the acquisition is “presumptively illegal,” cautioning it would potentially result in “higher fares and fewer seats, harming millions of consumers on hundreds of routes.”
Earlier, on June 1, JetBlue had announced its decision to divest all Spirit holdings at New York LaGuardia to Frontier, a move conditioned upon the successful completion of the JetBlue-Spirit transaction and requisite approvals from regulatory and airport authorities.
JetBlue CEO Robin Hayes said the asset divestiture was designed to “remove any doubt” regarding the company’s dedication to fostering competition. However, he maintained it was not a requisite to ensure the “continued growth of the vibrant ultra-low-cost carrier segment.”
In July, JetBlue agreed to adhere to a US judge’s directive to dissolve its “Northeast Alliance” with American Airlines, a partnership initiated three years ago permitting coordinated flights and revenue sharing between the two entities. The airline argues that ending this alliance sufficiently addresses government concerns, rendering objections to the Spirit purchase “entirely moot.”
The case is scheduled for trial on October 16, with the deal representing the most significant move in the US airline sector since the merger of American Airlines and US Airways in 2013.
