Justice Department sues to block JetBlue’s acquisition of Spirit

Justice Department sues to block JetBlue’s acquisition of Spirit
Justice Department sues to block JetBlue’s acquisition of Spirit

But the Justice Department disagreed in its lawsuit, arguing that JetBlue has gone from a disruptive force to an “ally of the big four” airlines. For example, the department pointed to the partnership between JetBlue and American in New York and Boston that makes it easier for them to sell seats on each other’s flights. The Department of Justice has filed a lawsuit to block this partnership, known as the Northeast Alliance, and a decision on this case is expected soon. The department said it would have taken legal action to block the acquisition of Spirit whether or not the North East Alliance was in place.

“This lawsuit is a very clear signal to the industry that no further consolidation is tolerable and that the government aims to block any further mergers or joint ventures,” said Diana Moss, president of the American Antitrust Institute, a group which lobbies for more aggressive enforcement of antitrust laws.

While JetBlue offers affordable ticket prices, Spirit offers even cheaper fares, making it a bigger threat to major airlines at the airports it serves, the department argued. Spirit is considered an “ultra low cost carrier,” a type of airline that works especially hard to keep costs and fares lower than most airlines. Among those carriers, Spirit stands out because it more frequently challenges larger airlines at their hub airports, according to the lawsuit.

As part of the deal, Spirit would be largely subsumed. The new airline would use the JetBlue brand, be based in New York and run by Mr. Hayes. It would have hundreds of planes and tens of thousands of employees. JetBlue said it plans to remove seats from Spirit’s densely populated planes to match its own layout, which antitrust officials say would make it difficult to keep costs and fares as low as Spirit.

Hayes said JetBlue will find ways to match Spirit’s savings without sacrificing customer service, such as using larger planes, which can carry more passengers, on certain routes.

“People shouldn’t assume that the only way to get a cheap fare is to have legroom, which most people would consider very difficult,” he said. “We have a different model; we are proud of this model. We wouldn’t be successful if we couldn’t meet the needs of a very price-sensitive group of customers. »

To make money and offer cheap tickets, Spirit charges fees for services that other airlines offer at no additional cost. These may be boarding passes printed by an agent. That approach frustrated many customers, but it helped Spirit grow quickly by attracting the most price-sensitive travelers who would be hurt the most by the merger, the Justice Department said.


. ministry Justice pursuit for block acquisition Spirit par JetBlue

PREV Asian markets mixed as investors further assimilate China’s modest growth target
NEXT Former Credit Suisse shareholder sells his entire stake in the bank