Economic Liberties Applauds DOJ for Blocking JetBlue-Spirit Merger, Urges DOT to Join in Protecting Passengers, Workers & Communities

March 7, 2023 Press Release

Washington, D.C. — In response to news that the U.S. Department of Justice Antitrust Division today filed suit to block JetBlue Airlines’ $3.8 billion acquisition of rival Spirit Airlines, the American Economic Liberties Project released the following statement.

“In blocking this blatantly anticompetitive deal, the Department of Justice is standing up for passengers, workers, and communities across the country,” said William J. McGee, Senior Fellow for Aviation & Travel at the American Economic Liberties Project. “Don’t believe JetBlue’s corporate spin: allowing JetBlue to gobble up a low-cost competitor and accelerate concentration in the aviation industry will immediately drive up fares nationwide. Secretary Buttigieg and the Department of Transportation have broad authority to block harmful mergers and promote competition throughout the airline industry. We’re also pleased to see reporting that DOT plans to use their power, embracing President Biden’s competition agenda, to stop the JetBlue-Spirit deal.”

In an effort to save this merger, JetBlue has relentlessly claimed that the deal will enhance competition in the airline industry by allowing it to challenge the Big Four of American, Delta, Southwest, and United. That claim is nothing more than corporate propaganda. What JetBlue means, is that this deal will help their corporate expansion strategy and put JetBlue on better standing relative to its rivals in an already overly concentrated industry. The fact remains that this merger, like all of the other airline mergers in recent decades, will reduce direct competition and push up airfares, leaving travelers, workers, and local communities with fewer, worse choices.

Indeed, research suggests that, if allowed to proceed, JetBlue’s $3.8 billion acquisition of Spirit airlines will:

  • Drive up fare prices in every single one of the 80 destinations that Spirit currently serves, and also increase average airfares nationwide.
  • Reduce the number of flights traveling to and from Spirit’s focus cities, thereby limiting access to air travel and undermining business growth in those communities.
  • Cut jobs and harm workers in JetBlue and Spirit’s focus cities. Transport Workers Union has warned that 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.”
  • Exacerbate existing anticompetitive conduct. JetBlue is already being sued by the U.S. Department of Justice for anticompetitive conduct related to its “Northeast Alliance” marketing deal with American Airlines.

The DOT already has broad, existing authority under the Clayton Act to block airline mergers. Similarly, under Title 49 of the U.S. Code, DOT has broad authority to investigate and prosecute anticompetitive airline mergers, and to deny route transfers that contravene the public interest or affect domestic competition. President Biden has urged Secretary Buttigieg to deliver much-needed relief to air travelers and to bring the DOT in line with the rest of his robust competition policy agenda.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.