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U.S. judge blocks JetBlue's acquisition of Spirit, saying deal would hurt consumers

A JetBlue plane is shown at John F. Kennedy International Airport in New York on March 16, 2017. A federal judge has blocked JetBlue Airways from buying Spirit Airlines, saying the $3.8 billion deal would reduce competition.
Seth Wenig
/
AP
A JetBlue plane is shown at John F. Kennedy International Airport in New York on March 16, 2017. A federal judge has blocked JetBlue Airways from buying Spirit Airlines, saying the $3.8 billion deal would reduce competition.

Spirit Airlines stock fell 23% and JetBlue Airways dropped nearly 9% Wednesday and after a federal judge blocked their proposed merger due to concerns that it would monopolize the industry.

JetBlue, the nation's sixth-largest airline, sought to buy Spirit, the seventh-largest, for $3.8 billion.

"A post-merger, combined firm of JetBlue and Spirit would likely place stronger competitive pressure on the larger airlines in the country," Judge William Young wrote in his Tuesday ruling. "At the same time, however, the consumers that rely on Spirit's unique, low-price model would likely be harmed."

Attorney General Merrick Garlandcalled the ruling "a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward."

Last March, the Justice Department, along with six states and the District of Columbia, filed a civil antitrust lawsuit to stop the acquisition.

In the complaint, the Department of Justice noted how Spirit's low-cost pricing structure, which it called the "Spirit Effect," has made air travel more accessible, and prompted other airlines to lower their prices to stay competitive.

JetBlue also sought to merge its Boston and New York City operations with American Airlines, which a federal judge blocked as well.

In 2022, JetBlue flew more than 39 million passengers and had operating revenues of about $9.1 billion, while Spirit carried over 38 million travelers and recorded about $5 billion in revenue.

Copyright 2024 NPR. To see more, visit https://www.npr.org.

Ayana Archie