Washington — US airline JetBlue's $3.8 billion offer to buy rival Spirit Airlines is likely to be blocked by the US Justice Department and Department of Transportation, according to several media reports citing people familiar with the matter.
The US Justice Department is expected to file an antitrust lawsuit in federal court, alleging that the elimination of Spirit would increase ticket prices and decrease options for travellers, the reports said.
Meanwhile, JetBlue argued that it will be able to bring down legacy carrier fares on more routes, benefitting more travellers than if the two continued as standalone airlines.
According to a third-party source published in April 2022 and reaffirmed with more recent data, JetBlue and Spirit have very limited overlap, and only overlap on 11% or less of the non-stop routes on which both of them fly.
Instead, both carriers primarily compete against the dominant Big Four airlines, JetBlue said in a statement.
JetBlue noted that it has already made unprecedented upfront commitments to divest all of Spirit's holdings in Boston and New York, as well as five gates and related assets at Fort Lauderdale, Florida, to allow for allocation to other ultra-low-cost carriers.
The divestitures significantly reduce the already small number of non-stop overlap routes flown by JetBlue and Spirit.
According to media reports on Monday, the US Department of Transportation is expected to begin a parallel proceeding to block the transfer of Spirit's airline operating certificate as incompatible with the public interest.
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