U.S. Lawsuits Are Highly Likely To Be Filed Against JetBlue's Spirit Deal

According to JetBlue Airways, there is a "high possibility" that the U.S. This week, the Justice Department will file an antitrust action to stop its $3.8 billion acquisition of budget rival Spirit Airlines.

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In a statement, JetBlue said that when it gave a deadline for the deal's completion in the first half of 2024, it took the prospect of a lawsuit into consideration. The extra time allows the businesses to challenge the government in court. According to Trade Algo, the Transportation Department, which is also looking into the transaction, is anticipated to take similar measures to halt the proposed sale.

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Requests for comment have not received a response from either the Justice or the Transportation departments.

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In late trading, shares of Spirit fell roughly 10% while those of JetBlue increased about 1%.

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Once Spirit Airlines accepted JetBlue's offer in late July, the ultra-low-cost carrier ended a months-long bidding war for the airline.

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According to the Trade Algo, JetBlue CEO Robin Hayes stated on Monday that he anticipated a government lawsuit to block the deal and that the airline would fight it.

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The DOJ will likely file a lawsuit against us this week, according to Hayes, who was reported as saying. They had their minds made up when they arrived at the table, in my opinion.

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In an effort to allay the government's antitrust worries, the businesses have proposed to divest Spirit's interests in Boston and New York as well as some assets in Florida.

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Meanwhile, JetBlue is awaiting the resolution of an American case. Justice Department is requesting that the court order American and JetBlue to end their Northeast Partnership. The matter went to trial last year.

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Due to the fact that the top four airlines in the United States—American Airlines, United Airlines, Delta Air Lines, and Southwest Airlines—control 80% of the domestic market, it was anticipated that JetBlue's acquisition of Spirit would be subject to a rigorous antitrust investigation from the outset.

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It is thought that JetBlue will be able to compete better against legacy airlines if it merges with Southwest Airlines.

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