US seeks to block JetBlue's Spirit Airlines deal at trial

A U.S. Department of Justice lawyer on Tuesday urged a federal judge to block JetBlue Airways' planned $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines at the start of closely-watched antitrust trial. The case in federal court in Boston is part of a broad effort by President Joe Biden's administration to preserve competition among the lowest cost airlines, ensuring air travel remains affordable for many more US consumers.

A U.S. Department of Justice lawyer on Tuesday urged a federal judge to block JetBlue Airways' planned $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines at the start of closely-watched antitrust trial.

The case in federal court in Boston is part of a broad effort by President Joe Biden's administration to preserve competition among the lowest cost airlines, ensuring air travel remains affordable for many more US consumers. Justice Department attorney Arianna Markel in her opening statement told U.S. U.S. District Judge William Young that the deal would lead to fewer flights and seats and higher prices.

She said a JetBlue internal analysis projected its fares would increase 30% once Spirit, which competes with JetBlue on around 100 routes nationally, is not a competitor. Passengers would suffer roughly $1 billion in net harm annually, she said. "JetBlue is counting on the fact that eliminating Spirit and the competition Spirit provides will allow JetBlue to raise fares," Markel said. "That is real harm to real people."

A merger between JetBlue and Spirit, the sixth and seventh largest U.S. carriers, respectively, would mark the first major U.S. airline combination since Alaska Airlines bought Virgin America in 2016. The sector is dominated by four U.S. carriers - United Airlines, American Airlines, Delta Air Lines and Southwest - who control 80% of the domestic market following a series of previous airline mergers, the Justice Department has said.

JetBlue has called the deal pro-consumer and has sought to ease U.S. regulators' antitrust concerns by agreeing to sell off Spirit's gates and slots at certain airports in New York City, Boston, Newark and Fort Lauderdale. But the Justice Department has said those divestitures are not enough, and in a lawsuit filed in March argued the combined airline would harm consumers by increasing fares and reducing choice on routes nationwide.

The department is suing alongside Democratic attorneys general from six states and the District of Columbia. They call Spirit a "disruptive and innovative airline" whose low-cost, no-frills model has forced price cuts industry-wide. Lawyers for the airlines will deliver their own opening statements later on Tuesday. They argue that allowing the deal to go forward would strengthen JetBlue's own long-standing reputation as a market disruptor.

While JetBlue would become the nation's fifth-largest airline, its lawyers say it would still only have less than 10% market share domestically. The department's case is part of a broader push by the Biden administration to aggressively step up antitrust enforcement, an initiative that has had mixed results in court.

JetBlue was already the focus of one of its earlier cases, with a different Boston judge, Leo Sorokin, in May siding with the government in finding that JetBlue's U.S. Northeast partnership with American Airlines violated antitrust law. JetBlue subsequently decided to terminate the alliance. American Airlines is appealing Sorokin's decision.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)