JetBlue’s attempted merger with Spirit went on trial Tuesday, with the Justice Department arguing the deal would be anti-competitive.
Opening statements from both sides were heard Tuesday in federal court in Boston. JetBlue has been preparing for a trial since the $3.8 billion merger was announced in July 2022.
JetBlue and Spirit are the sixth- and seventh-largest airlines in the U.S., respectively. If the merger goes through, the new company will control around 8% of the U.S. air travel market. United, Delta, Southwest and American together hold a dominant 80% share of the industry.
However, the feds claim the merger would get rid of a crucial factor in the market: Spirit’s ultra-low-cost flights. JetBlue has said it plans to repaint Spirit’s planes, redesign their cramped interiors and increase prices.
“Consumers are better off with an independent Spirit, not a JetBlue intent on removing seats from planes and charging higher fares,” government lawyers said in a pretrial brief.
JetBlue has argued that other low-cost airlines, such as Frontier and Allegiant, could fill that gap with more flights. The feds pointed out that budget carriers, and all airlines, are limited by a finite number of planes and pilots.
While the merger would not result in an industry-dominating monopoly, it would cut out a huge portion of the budget market, the Justice Department said. Observers have argued that Spirit’s rock-bottom fares forced other carriers to lower their own prices.
“JetBlue’s acquisition of Spirit would particularly hurt cost-conscious travelers,” Assistant Attorney General Vanita Gupta said when the feds announced the lawsuit in March.
The Biden administration has taken on several mega-merger antitrust fights across multiple industries, from book publishing to video game production. Earlier this year, the Justice Department successfully blocked a partnership between JetBlue and American in Boston and New York, which included LaGuardia, Kennedy and Newark airports.
With News Wire Services
