New York (CNN) The US Department of Justice is suing to block JetBlue’s $3.8 billion deal Shop discount carrier Spirit AirlinesFor the first time For more than 20 years The government tried to block the merger of American airlines.
The lawsuit, announced Tuesday by Attorney General Merrick Garland, is not surprising: The Biden administration has argued since taking office that there should be more competition between businesses, especially Aviation industryTo reduce consumer spending. the spirit (Save)with that Low base fee business model It charges customers extra for everything, including carry-on bags, prompting major carriers to offer a percentage of their seats at a much lower price.
Garland said allowing the merger would have a significant impact on consumers, especially those who rely on Spirit’s low fares.
“If not blocked, the JetBlue and Spirit merger will result in higher fares and fewer choices for millions of travelers across the country. The Justice Department is suing to stop that,” Garland said. “Companies in every industry must now understand that this Department of Justice will not hesitate to enforce antitrust laws and protect American consumers.”
But in the past 22 years, the Justice Department has allowed a series Five flight connections Without a case like the one announced on Tuesday. Those deals reduced the nine major U.S. carriers to four — American Airlines (AAL), Delta Air Lines (DAL), United Airlines (UAL) And Southwest Airlines (LUV). Between them, airlines control 80% of the country’s air traffic.
Jet Blue (Blue) He argues that the deal would create a new, stronger competitor to those big four airlines, without lowering fares. JetBlue and Spirit compete primarily with other carriers, so this combination will not significantly reduce competition. It has offered to cede landing and departure slots and gates at congested airports to other top-tier, low-cost carriers to encourage continued competition.
“The combination of JetBlue and Spirit and the rapid growth of low-cost carriers will ensure increased competition and lower fares,” JetBlue’s statement said.
It has pledged to push ahead with its merger efforts. And it hopes to defeat the lawsuit to still finalize its deal with Spirit by the end of the year. But it is struggling A separate case The Justice Department has been challenging the alliance with American Airlines for nearly 18 months.
While Spirit also now supports the deal, it previously opposed being bought by JetBlue. It was the first to agree Connecting without another very low-cost carrierFrontier Airlines, and its deal with JetBlue, has argued that it will raise fares as it faces several regulatory challenges.
It agreed only when JetBlue accepted the contract on its own Shareholders rejected a merger with Frontier in favor of a more lucrative offer from JetBlue.
When fighting the JetBlue deal, Garland cited a report by Spirit’s board that said, “A court would be very concerned that a JetBlue-Spirit combination would undercut a high-cost, high-fare airline. Cost, a low-fare airline and eliminate half of the low-cost airline in the United States.”
“We agree,” Garland added after reading the quote.
But now the decision on the deal is not in the hands of the Justice Department or the two federal agencies whose approval is needed before the proposed JetBlue-Spirit merger can be completed — the Transportation Department and the Federal Communications Commission. Instead, the decision will be made in the federal courts that hear the case.
The Justice Department filed the case in federal court in Boston. It had not yet been assigned to a specific judge as of Tuesday afternoon.
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