In a closely-watched antitrust trial, a U.S. Department of Justice attorney made a compelling case before a federal judge on Tuesday, October 31, urging them to halt JetBlue Airways‘ proposed US$3.8 billion purchase of the ultra-low-cost carrier, Spirit Airlines. According to Reuters news agency, the trial, unfolding in federal court in Boston, is part of the broader efforts by President Joe Biden’s administration to safeguard competition in the realm of budget airlines, ensuring that air travel remains accessible to a wide range of U.S. consumers.
During her opening statement, Justice Department attorney Arianna Markel emphasised that this acquisition would inevitably result in a reduction in the number of flights and available seats, leading to higher prices. She pointed to an internal analysis conducted by JetBlue, indicating that its fares could surge by 30% once Spirit Airlines, a direct competitor on approximately 100 national routes, is no longer in the picture. This, she argued, would inflict roughly US$1 billion in annual harm on passengers.
Markel stated, “JetBlue is banking on the elimination of Spirit and the competition it provides, allowing them to increase fares. This translates to real harm for real people.”
JetBlue’s attorney, Ryan Shores, countered by characterising the case as a “misguided” challenge to the merger of the U.S.’s sixth and seventh largest airlines, which together command less than 8% of the domestic market that is predominantly dominated by four larger airlines.
Shores argued that these four major U.S. carriers—United Airlines, American Airlines, Delta Air Lines, and Southwest Airlines—hold an 80% share of the domestic market, following prior airline mergers approved by the federal government. He maintained that the government’s effort to stymie JetBlue’s expansion and its potential to challenge these major players was a misstep, ultimately detrimental to competition and consumers.
Shores remarked, “The government, in this case, has lost sight of the bigger picture.” (£1.00 = US$1.21 at time of publication).
