Connect with us

Hi, what are you looking for?

Real Investment StarReal Investment Star

Stock

Judge blocks JetBlue-Spirit merger in a major win for Biden’s Justice Department

A federal judge blocked JetBlue Airways’ purchase of budget rival Spirit Airlines, a major win for Biden’s Justice Department, which sued to stop the merger, alleging it would drive up fares for some of the most price-sensitive consumers.

JetBlue’s proposed $3.8 billion purchase of discounter Spirit would have produced the country’s fifth-largest airline, a deal the carriers said would help them better grow and compete against larger rivals like Delta and United.

The decision, handed down Tuesday by a federal judge in Boston, marks a victory for a Justice Department that has aggressively sought to block deals it views as anticompetitive.

“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,” the Justice Department alleged in its lawsuit in March.

Spirit shares plunged after the decision was announced and were down 60% shortly after 1 p.m. ET. JetBlue shares were down about 5% after briefly spiking.

Neither airline immediately commented on the decision.

JetBlue has said access to Spirit’s similar fleet of Airbus planes would allow it to grow quickly when planes and pilots are in short supply, growth it argues it needs to compete against bigger airlines. Years of previous consolidation left United, Delta, American and Southwest in control of about three-quarters of domestic market.

The decision leaves New York-based JetBlue grappling with next steps, tasking incoming CEO Joanna Geraghty with steering the airline on a new path. Geraghty was announced as successor to CEO Robin Hayes after he said earlier this month that he would retire.

The airline operates in highly congested airspace in New York and other cities, and had planned to use Spirit as a way to gain access to more routes and travelers.

JetBlue planned to remodel Spirit’s yellow planes by removing the branding and seats from the tightly-packed planes to provide more of a full-service model.

Spirit had grown rapidly in recent years by offering cheap fares and fees for everything else from seat assignments to carry-on luggage.

This post appeared first on NBC NEWS

Enter Your Information Below To Receive Latest News, And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Editor's Pick

    ERP or Enterprise Resource Planning solutions help businesses of all sizes manage their daily business operations. First used in the 1990s, ERP systems have...

    Investing

    Democratic Gov. Janet Mills on Wednesday vetoed a bill aimed at prohibiting foreign influence in Maine elections, but voters will get the final say...

    Latest News

    There were several reasons offered in support of the congestion pricing plan that was supposed to go into effect in New York at the...

    Latest News

    House Speaker Mike Johnson (R-La.) on Wednesday appointed Reps. Scott Perry (R-Pa.) and Ronny Jackson (R-Tex.), two Trump loyalists who denied the results of...

    Disclaimer: realinvestmentstar.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 realinvestmentstar.com