Judge blocks JetBlue-Spirit $3.8B merger

A federal judge blocked JetBlue’s $3.8 billion deal to buy Spirit Airlines on Tuesday, citing the proposed deal would harm competition, violate antitrust laws and increase airfares.

The decision is a victory for the Department of Justice, which sued to block the merger last March to preserve low-cost options for travelers.

Following the ruling, shares of Spirit Airlines plummeted 47%, while JetBlue’s rose 5%. Both airlines are considering an appeal.

The setback is JetBlue’s second major court defeat in under a year, potentially reshaping its growth strategy. Last May, a judge ruled that American Airlines Group must dissolve its alliance with JetBlue Airways.

Also, in 2022, JetBlue successfully bid against Frontier Airlines for the Spirit merger, aiming to create the nation’s fifth-largest domestic airline behind Delta, American, United, and Southwest. 

The court ruling yesterday may open the door for Frontier to make another attempt to buy Spirit.

It also sets a precedent for future airline mergers and could impact Alaska Air Group’s plans to buy Hawaiian Airlines.