Judge Pushes Back Trial For JetBlue-Spirit Airlines Merger

The October 16 trial in the US Justice Department’s lawsuit seeking to halt JetBlue Airways planned $3.8 billion acquisition of Spirit Airlines has been pushed back a week, as reported today by Reuters.

Moving the trial back

On March 21, 2023, a US judge scheduled the trial to stop JetBlue and Spirit Airlines’ proposed merger to take place on October 16. US District Judge William Young in Boston scheduled the first hearing of this blockbuster case to be taken on that date, despite JetBlue’s legal team pushing for a trial in September. According to Young, in a report published by Reuters, October was the soonest his schedule would allow him.

Reuters journalist David Shepardson reported on Friday that the trial has been pushed back. The US judge in Boston pushed back the merger trial of these two airlines by one week, to October 23.

In March, Judge Young promised to move expeditiously and try to rule on the trial by 2023’s end, despite suggestions from the Justice Department to give the government until as late as January to try the case.

What’s happening?

In this case, court approval is necessary for the merger to become effective, barring any settlement between the parties in the meantime. Nonetheless, the Department of Justice is against JetBlue’s $3.8 billion acquisition of the ultra-low-cost carrier. Lawyers for dozens of consumers have filed similar lawsuits against the merger.

Attorney General Merrick B. Garland said in March if the acquisition is approved, “JetBlue plans to abandon Spirit’s business model, remove seats from Spirit’s plane, and charge Spirit’s customers higher prices.”

The Department of Justice also believes that a JetBlue-Spirit combination could result in a higher-cost airline that would absorb a low-cost company, removing about half of the ultra-low-cost capacity in the United States.

What is JetBlue saying?

Meanwhile, JetBlue believes a combined JetBlue and Spirit company would bring together the best of both airlines. They would create a “customer-centric, low-fare alternative to the dominant “Big Four” airlines.” Customers would benefit from access to more routes, greater connectivity, and better onboard experiences, said the company.

Concerns remain

Nonetheless, the concerns regarding the possible impact of a Jetlue-Spirit merger on the low-cost segment remain. These concerns began when Spirit shareholders opted to drop out of the first proposed merger between Spirit and Frontier Airlines, instead choosing the JetBlue offer. At the time, JetBlue also had the Northeast Alliance with American Airlines, which only fueled the monopoly concerns. This alliance ended as of July 21, 2023, as a condition for the merger.

Photo: Vincenzo Pace | Simple Flying.

Another condition that has recently taken place is JetBlue announcing a definitive agreement with Allegiant Air to transfer several of Spirit Airlines airport holdings and some of its own assets to the ultra-low-cost carrier.

Through this initiative, Allegiant Air would receive two gates in Boston, two gates in Newark, and 43 take-off and landing authorizations (also known as slots) in Newark. JetBlue would also relinquish up to five gates at Fort Lauderdale back to the Broward County Aviation Department.

Why do you think the trial was pushed back a week? Let us know in the comments below.

Source: Reuters.