In July 2022, JetBlue Airways announced its plan to acquire Spirit Airlines in a $3.8 billion transaction. The DOJ’s trial to block the merger begins on October 30, 2023, in the District Court of Massachusetts in Boston.

• JetBlue Airways, based in New York City, launched in 2000 and operates 1,000 daily flights to more than 100 destinations in the United States and 26 foreign countries in the Caribbean, Mexico, Central America, South America, the UK, and Europe.
• Spirit Airlines, based in Miramar, Florida, launched in 1992 and operates 500 daily flights to 90 destinations in the United States, the Caribbean, Mexico, Central America, and South America. Spirit is the nation’s largest “Ultra Low Cost Carrier” (ULCC), which exerts competitive pressure on other airlines.
• JetBlue and Spirit currently compete head-to-head on 51 nonstop routes, with both heavily concentrated in the Northeast and Florida. According to the Pretrial Brief filed by the Department of Justice (DOJ), the acquisition will greatly reduce competition nationwide: “The proposed acquisition is presumptively illegal in at least 183 markets where JetBlue and Spirit compete, including 51 nonstop overlaps. In each of those markets, the proposed acquisition would result in (i) a firm ‘controlling an undue percentage share’ of the market, and (ii) a ‘significant increase in the concentration’ of that market.”
• The airline industry is already concentrated, with American, Delta, Southwest, and United controlling more than 80% of the market.
• The Department of Justice (DOJ) filed to block the acquisition on March 7, 2023.
• The Department of Transportation (DOT) also announced its opposition to the acquisition on March 7, 2023, based on its own regulatory authority, but will not be taking any further action before the DOJ’s case concludes. DOT Secretary Buttigieg’s public condemnation of the JetBlue-Spirit merger—which was announced the same day the DOJ launched its lawsuit—marked the first time ever that DOT opposed an airline merger.

Eliminating Spirit as a competitor will drive up airfares.

• JetBlue accidentally released documents about its post-merger plans, which include removing an average of 24 seats from all Spirit planes, increase fares from 24% to 40%, and anticipated 30% price increases from other airlines across Spirit-served routes.
• JetBlue themselves estimate that when Spirit exits a route, fares increase by 30% on average, and JetBlue plans to cut up to 15% of Spirit’s capacity and raise prices with the goal of extracting 24% more revenue per seat.
• Even travelers not flying JetBlue or Spirit will suffer the consequences. While JetBlue and Spirit control only 3% and 4.9% of the domestic air market, respectively, Ultra Low Cost Carriers like Spirit exert strong competitive pressures on airfares, even for the largest carriers.
• Even though ULCCs like Spirit use low-road business models rife with junk fees and deceptive pricing, they still lower prices across the market. According to one MIT study, the presence of an Ultra Low Cost Carrier on a route forces fares to drop by an average of 21%.
• According to the US Department of Transportation’s Quarterly Consumer Airfare Reports, the lowest fares are on routes serviced by Ultra Low Cost Carriers Allegiant, Frontier, and Spirit; newcomers Avelo and Breeze; and to a lesser degree Low Cost Carriers JetBlue and Southwest.

The merger will exacerbate regional inequality and limit access in air travel.

• Both Spirit and JetBlue operate “focus cities” and have a presence in many large markets. As with the closing of hub cities in previous waves of airline mergers, these focus cities can anticipate losses in service and jobs.
• JetBlue’s focus cities are NYC, Boston, LA, Fort Lauderdale, Orlando, Long Beach, Washington/IAD.
• Spirit’s focus cities are Fort Lauderdale, Detroit, Orlando, Miami, Chicago, Dallas, Houston, Las Vegas, and Atlantic City.
• In anticipation of the merger, Spirit is already eliminating 37 routes, mostly connecting Florida airports to Philadelphia, Baltimore, Houston, Los Angeles, Phoenix, and San Juan.
• Spirit serves 19 cities nonstop from Detroit. With JetBlue stating it will focus on the Northeast, it seems apparent Detroit will suffer a loss of service.
• If the merger goes through, Miramar, Florida will lose Spirit’s headquarters, and likely lose a new corporate facility under construction in Dania Beach, close to the Fort Lauderdale Airport.

DOJ has recently succeeded in challenging JetBlue’s anticompetitive conduct.

• JetBlue and American Airlines recently lost an antitrust case brought by the DOJ challenging their “Northeast Alliance” de factor merger to collude in the New York City and Boston markets.