Airlines expect American action to stop the merger with Spirit - Liberty

Wednesday, November 22, 2023

Airlines expect American action to stop the merger with Spirit

 

JetBlue believes it is "very likely" that the Justice Department will sue the company over its planned acquisition of Spirit Airlines this week. Joe Raedle/Getty Images

WITHINBUCKS - JetBlue Airways said Monday that the Justice Department will likely sue the company this week over its planned acquisition of Spirit Airlines. This $3.8 billion deal of his could create new challengers to her four dominant careers in the US, but it would also spur industry consolidation.


JetBlue said it has been preparing for such a lawsuit for a long time and has not changed its timeline for signing the deal, provided it overcomes the expected court hurdles.

"I think there's a good chance we'll get a complaint from the Justice Department.

Taking Spirit out of the market would limit competition and further strengthen an already concentrated industry, say critics of the deal. After the deal, JetBlue reconfigured Spirit's densely packed planes, removing seats, increasing legroom, and adjusting the economics of each flight.

According to two people familiar with the Justice Department's plans, the government lawsuit says the combined airlines will not raise prices after removing seats from Spirit aircraft, reducing revenue per passenger. says. They say it can't be increased. No, I would argue that it is not possible.

Acquiring Spirit will allow JetBlue to accelerate its growth plans. Today JetBlue controls more than 5% of the US aviation market. After the acquisition, the company will acquire its 10% stake and become its fifth largest airline in the country. United Airlines, the fourth largest airline, has a 15% market share. Southwest Airlines, Delta Air Lines, and American Airlines each have over 17% share.

"The combination of JetBlue and Spirit will create an attractive national challenger to these dominant airlines," JetBlue said in a news release Monday, with several people supporting the deal. I explained the instruction manual.

The acquisition benefits consumers, disrupts the industry, allows JetBlue to bring lower fares to new markets, and forces those major airlines to match its lower prices.

But two of his people familiar with the Justice Department's plans said the lawsuit would allow other airlines with different cost structures than Spirit to secure slots for Spirit that JetBlue might offer. I said I could. said he claimed it

Opponents of the sale argue that the Department of Transportation, in addition to the Department of Justice, could sabotage the deal by blocking the transfer of business certificates.

Shares of Spirit fell more than 8% after reports of expectations of a federal move to block the takeover were reported on Monday. JetBlue shares rose about 1%.

Unions representing workers at both airlines split last month over whether to proceed with a merger with Spirit's Cabin Crew Association C, which represents 5,600 flight attendants.

Labor union president Sarah Nelson said in the letter: She said, "This is an anti-merger, a merger."

In a separate letter, representatives of the transport union, which represents JetBlue's 6,800 flight attendants, told Garland and Buttigieg that the deal violated antitrust laws and undermined competition and workers. said he would let him, said the deaf man. She demanded that the takeover be blocked.

Massachusetts Democrat Senator Elizabeth Warren wrote a letter in September urging Buttigieg to use his ministry's "historically underutilized" powers to intervene.

JetBlue is also awaiting the outcome of his DOJ antitrust lawsuits over its partnership with American Airlines in Boston and New York. In that case, a federal judge in Boston is expected to make a decision soon.




Airlines expect American action to stop the merger with Spirit
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