JetBlue Airways has officially ended its partnership with Fort Worth-based American Airlines, opting not to appeal a federal judge’s ruling blocking the deal but instead to pursue its $3.8 billion acquisition of Spirit Airlines.
As previously reported in The Dallas Express, both the JetBlue-American and the JetBlue-Spirit deals were struck down by federal regulators over antitrust violations.
As suggested in a statement released Wednesday, JetBlue believes it stands a better chance of receiving reconsideration from the U.S. Justice Department if it only pursues a merger with Spirit.
“After much consideration, JetBlue has made the difficult decision not to appeal the court’s determination … and has instead initiated the termination of the NEA [Northeast Alliance], beginning a wind down process that will take place over the coming months,” New York-based JetBlue said in a July statement. “We will now turn even more focus to our proposed combination with Spirit.”
In response to JetBlue’s announcement, American Airlines offered its respect to the East Coast airline but said it plans to move forward with an appeal of its own.
“JetBlue has advised us that it will not join the appeal of the District Court ruling in the Northeast Alliance case. We, of course, respect JetBlue’s decision to focus on its other antitrust and regulatory challenges,” American Airlines said in a statement.
“At the same time, JetBlue’s decision and reasoning confirm our belief that the NEA has been highly pro-competitive and that an erroneous judicial decision disregarding the NEA’s consumer benefits has led to an anticompetitive outcome. American will therefore move forward with an appeal,” the company said.
A trial to determine the legality of the JetBlue-Spirit merger is currently scheduled for October.
“If allowed to proceed, this merger will limit choices and drive up ticket prices for passengers across the country” and “eliminate Spirit’s unique and disruptive role in the industry,” asserted Attorney General Merrick Garland during a press conference in March.
As U.S. Associate Attorney General Vanita Gupta said in a Justice Department news release in March, JetBlue’s acquisition of Spirit “would particularly hurt cost-conscious travelers” by “lead[ing] to fewer seats and higher prices for travelers.”
“Ultra-low-cost carriers make air travel possible so more Americans can take a much-needed family vacation or celebrate or mourn together with loved ones,” she added.
This sentiment was also shared by Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division.
Mekki alleged in the same release that “JetBlue’s proposed acquisition of Spirit eliminates a disruptive, low-cost option for millions of Americans.”
“Whether they fly Spirit or not, travelers throughout the United States benefit from an independent Spirit because where Spirit competes, other airlines — including JetBlue — are forced to compete more vigorously by lowering fares, offering greater innovations, and delivering more consumer choice,” he said.
JetBlue CEO Robin Hayes argued back in March that the merger with Spirit would make it better able to compete with large carriers like United, Delta, and Southwest, suggesting it was something the DOJ hasn’t fully considered.
“We believe the DOJ has got it wrong on the law here and misses the point that this merger will create a national low-fare, high-quality competitor to the Big Four carriers which — thanks to their own DOJ-approved mergers — control about 80% of the U.S. market,” Hayes said, according to AP News.
