The Department of Justice (DOJ) sued to block a merger between JetBlue Airways and Spirit Airlines on Tuesday, contending that the deal would lead to higher fares and fewer choices for passengers.
The department’s attempt to block the $3.8 billion deal, which would create the nation’s fifth-largest carrier, argues that the merger would hinder Spirit’s current ability to create lower fares in markets served by larger airlines.
In a complaint filed in the U.S. District Court for the District of Massachusetts, the DOJ asserted that JetBlue’s plans would harm passengers who rely on Spirit’s low-priced tickets, and it would also affect those who benefit from the more competitive prices on other carriers.
“If the acquisition is approved, JetBlue plans to abandon Spirit’s business model, remove seats from Spirit’s planes, and charge Spirit’s customers higher prices,” DOJ wrote in court filings. “JetBlue’s plan would eliminate the unique competition that Spirit provides — and about half of all ultra-low-cost airline seats in the industry — and leave tens of millions of travelers to face higher fares and fewer options.”
DOJ filed the suit with the Democratic attorneys general for D.C., Massachusetts and New York.
The move marks the Biden administration’s latest attempt to prevent corporate consolidation, adding to a string of antitrust enforcement efforts in industries like book publishing and digital advertising.
Attorney General Merrick Garland and other DOJ officials formally announced the suit during a press conference on Tuesday.
“I want to reiterate that the department continues to closely examine practices and review proposed mergers to ensure that they are consistent with federal antitrust law,” Garland said. “Companies in every industry should understand by now that this Justice Department will not hesitate to enforce antitrust laws and protect American consumers.”
JetBlue has said the deal will create a low-fare challenger to the country’s four largest airlines — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines — that make up about 80 percent of the market.
“JetBlue’s acquisition of Spirit should not be considered in a vacuum — it is simply the latest step in a trend toward consolidation in the airline industry,” DOJ wrote.
In advance of the announcement, JetBlue this week released new data that the company said shows how the merger could increase competition. The two airlines overlap on 11 percent of their nonstop routes, and JetBlue says it will divest all of Spirit’s holdings in Boston and New York — JetBlue’s two largest markets — to further reduce the overlap.
If allowed to merge, the new company would comprise about 9 percent of the market. JetBlue shareholders approved the deal last fall after the airline emerged from a bidding war with Frontier to acquire Spirit.
The Hill has reached out to JetBlue and Spirit for further comment.
—Updated at 11:58 a.m.