Remedy for Takeoff: Assessing Whether Past Airline Merger Remedies Could Impact JetBlue-Spirit Merger

On March 7, the U.S. Department of Justice (DOJ), along with the attorneys general of Massachusetts, New York, and the District of Columbia (together the Government Enforcers), sued to block JetBlue Airways Corp.’s (JetBlue) planned $3.8 billion acquisition of Spirit Airlines, Inc. (Spirit). The Government Enforcers have alleged that JetBlue and Spirit fiercely compete head-to-head on dozens of routes and a merger would eliminate Spirit—an alleged maverick that has purportedly defied industry coordination to become the fastest-growing “ultra-low-cost carrier” in the United States—thus substantially lessening competition in violation of Section 7 of the Clayton Act. See Complaint at 1-3, United States v. JetBlue Airways Corp. and Spirit Airlines, Inc., No. 1-23-cv-10511 (D. Mass. Mar. 7, 2023), ECF No. 1. Claiming that JetBlue plans to remove seats from planes, the Government Enforcers assert that the deal will result in anticompetitive effects that include the elimination of head-to-head competition between JetBlue and Spirit, an increase in ticket prices, the reduction in passenger capacity and consumer choice, and the facilitation of greater airline competitor coordination.

In response to the Government Enforcers’ suit, JetBlue and Spirit stated they were confident that “the proposed merger is procompetitive” and they would continue to advance their acquisition plans. Press Release, JetBlue, JetBlue and Spirit Will Continue to Advance Plan to Create Compelling National Low-Fare Challenger to the Dominant U.S. Carriers (Mar. 7, 2023), https://news.jetblue.com/latest-news/press-release-details/2023/JetBlue-and-Spirit-Will-Continue-to-Advance-Plan-to-Create-Compelling-National-Low-Fare-Challenger-to-the-Dominant-U.S.-Carriers/default.aspx. With trial set for Oct. 16, 2023, the airlines appear ready and willing to defend their position. However, if JetBlue and Spirit were to explore the possibility of a settlement agreement with the Government Enforcers, as they recently did with the state of Florida, they might benefit from looking back to the remedies that the DOJ previously accepted in connection with the merger of US Airways Group, Inc. “US Airways) and AMR Corp. (American). To what degree those past remedies are acceptable today may also provide insight into the shift in antitrust enforcement under President Joe Biden’s administration.

US Airways-American Merger