Key takeaways:
- The US Justice Department has announced it will be filing a lawsuit to block JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines.
- The Biden administration has been vocal in its stance that there needs to be greater competition between businesses, especially in the airline industry, to lower costs for consumers.
- The Justice Department’s antitrust division has been investigating the merger since it was announced in November 2020.
The US Justice Department has announced it will be filing a lawsuit to block JetBlue Airways’ proposed $3.8 billion acquisition of Spirit Airlines. Attorney General Merrick Garland said the merger would significantly harm consumers, particularly those who rely on low-cost air travel.
The Biden administration has been vocal in its stance that there needs to be greater competition between businesses, especially in the airline industry, to lower costs for consumers. Spirit Airlines has a low base fare business model that charges customers extra for everything, including carry-on bags, which has prompted larger carriers to offer a percentage of their seats at the lowest possible price.
The lawsuit is the first time in more than 20 years that the government has sought to block a US airline merger. JetBlue CEO Robin Hayes said he expected a trial to take place before the merger could be finalized, which was expected to happen in the first half of 2024.
The Justice Department’s antitrust division has been investigating the merger since it was announced in November 2020. The department has been looking into whether the deal would reduce competition and lead to higher prices for consumers. The lawsuit will now be heard in a federal court.
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