A federal judge blocked JetBlue’s deal to acquire Spirit Airlines on Tuesday, January 16, following the US Department of Justice’s finding that the deal is harmful to competition in air travel.
U.S. District Court Judge William Young said JetBlue intends to convert Spirit planes to JetBlue’s layout, raising fares.
In the decision, the judge stated that “The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
The value of Spirit’s shares on the Stock Exchange fell by half while JetBlue’s lost 9% on Wednesday.
The purchase deal closed in July 2022 for $3.8 billion after months in which Spirit was harassed by JetBlue as it sought to approve a merger with Frontier Airlines.
The union of the two companies could create the 5th largest airline in the USA, behind only Delta, American, United and Southwest.
The Department of Justice in President Joe Biden’s administration, however, positioned itself against the deal as it saw a potential reduction in the number of flights and higher prices for consumers.
Together, the two airlines have a fleet of almost 500 aircraft, the vast majority of which are Airbus jets.
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In a statement, JetBlue and Spirit said they will “continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers.”
