Federal Judge Blocks JetBlue-Spirit Airlines Merger

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The Facts

  • A federal judge on Tuesday blocked JetBlue Airways' $3.8B proposed acquisition of Spirit Airlines. The ruling sided with the Dept. of Justice (DOJ), which suggested that the deal would hurt competition and consumers.

  • Judge William G. Young of the US District Court for the District of Massachusetts ruled that the proposed merger would hurt cost-conscious travelers who value Spirit for its low prices. He added that JetBlue would have an incentive to "abandon its roots as a maverick, low-cost carrier."

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The Spin

Narrative A

This ruling protects competition and is a massive victory for consumers that will likely save the existence of cheap air travel. Spirit is known for its low prices that allow many more people to travel, and a merger with JetBlue would have disrupted that business model. The government has an obligation to prevent businesses from consolidating and vesting complete power in a handful of industry giants. Young's ruling not only protects cost-conscious consumers but also strengthens antitrust protections against oligopolies.

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Narrative B

While Judge Young and the DOJ may believe that they're sticking up for consumers, the fact is they're only entrenching the power of the top four airlines and facilitating the downfall of Spirit and cheap airlines. Spirit is in serious financial trouble, and it needed JetBlue to revive its struggling business. Instead of allowing JetBlue to save Spirit, the government blocked a necessary merger, causing the airline's share price to plummet dramatically. Instead of saving cheap air travel, the DOJ has pushed it to the brink of viability.

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