by Donald Wood
Last updated: 8:45 AM ET, Tue October 31, 2023
The United States Department of Justice will begin its efforts
in federal court on Tuesday to block JetBlue Airways from acquiring Spirit
Airlines.
According to Reuters.com,
U.S. District Judge William Young will lead a jury trial that is expected to
last around three weeks, which will look to determine whether the $3.8 billion
acquisition proposal between JetBlue and Spirit is legal.
U.S. President Joe Biden and his administration took the case
over concerns about preserving competition among low-cost carriers, ensuring
air travel remains affordable for American travelers.
¡°The transaction promises to replace Spirit with a
higher-cost airline that offers fewer seats, charges higher fares, and is less
likely to upset other airlines' higher prices,¡± the Justice Department said in
court filings.
In an effort to show how the potential merger would be
consumer-friendly, JetBlue agreed to sell off Spirit¡¯s gates and slots at
certain airports in New York City, Boston, Newark and Fort Lauderdale.
In response, the Justice Department and several state district
attorneys filed a lawsuit in March, claiming the combined airline would ¡°harm
consumers by increasing fares and reducing choice on routes nationwide.¡±?
Government officials said the acquisition would cost
travelers ¡°$2 billion in higher fares annually,¡± while JetBlue claims it would
still own less than 10 percent of the domestic market share after the merger.
A JetBlue spokesperson said in a statement, "our
combination with Spirit is the best opportunity to disrupt the industry by
increasing competition and choice, creating a long overdue national low-fare
challenger to the dominant Big Four airlines."
Earlier this year, a judge ruled that the Northeast
Alliance, which was to combine forces and revenue in the valuable northeast
corridor between American Airlines and JetBlue, was illegal. The judge ruled
there would be a lack of competition, ultimately driving up fares.
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