The Department of Justice (DOJ) blocked Spirit Airlines' merger with JetBlue in order to preserve competition in the domestic airline industry. Now, it looks like Spirit may go under.
In July 2022, JetBlue announced its acquisition of the foundering Spirit Airlines, which reported a net loss of $36 million in the third quarter of 2022 and $270 million in that year's fourth quarter. Ted Christie, Spirit Airlines' president at the time, described the deal as an "agreement to create the most compelling national low-fare challenger to the dominant U.S. carriers." But the DOJ saw things in a less flattering light.
The DOJ sued to block the merger in March 2023, alleging that "the proposed transaction [would] increase fares and reduce choice on routes across the country" by eliminating JetBlue's "Largest Ultra-Low-Cost Rival," Spirit, from the market. The DOJ based its intervention on the Clayton Act, which prohibits acquisitions whose "effect…may be substantially to lessen competition or to tend to create a monopoly." The U.S. District Court for the District of Massachusetts blocked the merger in January 2024.
