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A federal judge has halted JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines, citing concerns about its potential to reduce competition and increase consumer prices.
In a recent court filing, U.S. District Judge William Young stated that the merger, which would have positioned JetBlue as the fifth-largest airline, would “substantially lessen competition,” violating the Clayton Act’s principles aimed at safeguarding consumers from anticompetitive practices.
Judge Young explained that while the merger might boost JetBlue’s competitiveness against larger airlines, it would simultaneously eliminate one of its key rivals, Spirit Airlines.
Spirit, known as the nation’s premier low-cost airline, would ultimately be absorbed by Jet Blue, which Judge Young says would likely lead to increased fares and impact the budget-conscious clientele that Spirit Airlines typically attracts. She added, “If JetBlue were permitted to gobble up Spirit -– at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline.”
Judge Young also raised concerns that the merger could lead JetBlue away from its origins as a budget-friendly carrier, resulting in an intensified “monopoly” in the airline industry.