JetBlue, Spirit Airlines call off $3.8 billion merger on antitrust hurdle
By David Shepardson and Aatreyee Dasgupta
WASHINGTON (Reuters) -Low-cost air carriers JetBlue Airways (NASDAQ:JBLU) and Spirit Airlines (NYSE:SAVE) canceled their $3.8-billion merger agreement on Monday, seeing no path forward after a U.S. judge blocked the deal in January on anti-competition concerns.
A successful deal would have created the fifth-largest carrier in the United States and helped Spirit ensure its survival, but the deal had been on the ropes ever since a Boston judge said it would harm consumers by reducing competition.
The decision is a victory for the Biden Administration, which has taken a hard line against tie-ups in the aviation sector and argued the deal would boost ticket prices for consumers.
U.S. Attorney General Merrick Garland said the decision by JetBlue «is yet another victory for the Justice Department’s work on behalf of American consumers» saying the merger «would have caused tens of millions of travelers to face higher fares and fewer choices.»
The administration has used antitrust action and other enforcement efforts to try to bring down prices for U.S. residents across several industries.
«With the ruling from the federal court and the Department of Justice’s continued opposition, the probability of getting the green light to move forward with the merger anytime soon is extremely low,» JetBlue CEO Joanna Geraghty told employees in an internal note seen by Reuters.
«Even if the ruling was overturned on appeal, we simply don’t see a path to regulatory approval by the required July 24 deadline.»
Spirit CEO Ted Christie said in a statement, «we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement.»
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