In July 2022, JetBlue Airways announced its plan to acquire Spirit Airlines in a $3.8 billion transaction. Regulators are challenging this illegal combination.

• 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, and the UK.
• 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 in over 40 routes, with both heavily concentrated in the Northeast and Florida, and the acquisition would reduce competition in more than 150 routes.
• The airline industry is already concentrated, with American, Delta, Southwest, and United controlling more than 80% of the market.
• The Department of Justice filed to block the acquisition on March 7, 2023.
• The Department of Transportation also announced its opposition to the acquisition on March 7, 2023, based on its own regulatory authority.

Eliminating Spirit as a competitor will drive up airfares.

• 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. 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. JetBlue themselves estimate that when Spirit exits a route, fares increase by 30% on average.
• JetBlue plans to cut up to 15% of Spirit’s capacity and raise prices with the goal of extracting 24% more revenue per seat.

Forecloses future competition

• Spirit, the only successful major passenger airline market entrant in decades, has a growth rate greatly outpacing every major airline.
• Spirit is six times larger than it was in 2010 with plans to double its fleet size in the next two years. JetBlue’s hostile takeover bid throws that growth into question.

The merger will threaten air travel and business in specific cities. 

• 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 may lose Spirit’s headquarters, and likely lose a new corporate facility under construction in Dania Beach, close to the Fort Lauderdale Airport. New York may lose JetBlue’s corporate headquarters.

JetBlue has a history of anticompetitive conduct.

• JetBlue is currently being sued by the DOJ on antitrust grounds for its “Northeast Alliance” – a de facto merger aligning three quarters of JetBlue’s flight capacity with the largest U.S. airline, American Airlines.

Union Opposition

• The Transport Workers Union, which is America’s largest airline labor organization and represents 6,800 JetBlue flight attendants and 250 Spirit gate agents, has strongly opposed the merger.
• TWU states it “warns that more than 1,300 workers at JetBlue headquarters, and as many as 8,000 frontline workers based in New York could face future displacement or job loss from the change,” and that it believes that JetBlue “has the intent to not fully honor” union agreements in place with JetBlue and Spirit workers.

The U.S. Department of Transportation has existing authority to block the merger.

Under its Title 49 authority, DOT can block domestic route transfers from one airline to another if they are not in the public interest, based on consideration of factors — including the effect of the transfer on domestic airline competition. Historically, the DOT has interpreted this power as applying only to international route transfers, but this is an overly narrow view of its own substantial authority.