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The Justice Department is expected to file suit to block a merger between JetBlue Airways and Spirit Airlines, citing the possibility of higher fares and fewer consumer choices in an industry that has seen waves of consolidation over the years, according to several people familiar with the matter.
The challenge, which could come as early as Tuesday, will argue that the $3.8 billion deal will be particularly harmful for price-sensitive consumers who have come to depend on Spirit’s low fares. Travelers who don’t fly Spirit could also lose out, the people said the DOJ will argue, because JetBlue plans to reconfigure Spirit’s planes to reduce the seat count while eliminating an aggressive competitor with a history of lowering fares in markets with larger airlines – including price battles with JetBlue.
The case is the latest example of the Biden administration’s efforts to fight consolidation after challenging proposed mergers in key industries, including publishing, health care and technology. The federal government’s expected attempt to block the merger comes as high-profile service disruptions have raised concerns about whether the industry has become too concentrated.
After years of bankruptcies and airline mergers, four domestic carriers – American Airlines, Delta Air Lines, United Airlines and Southwest Airlines – account for about 80 percent of the market. JetBlue is the sixth-largest U.S. carrier, while merging with Spirit would make it fifth.
On Monday, amid speculation that a DOJ suit was forthcoming, JetBlue released updated data to boost its case for a merger. The airline said a larger JetBlue, after absorbing Spirit, would force competitors to bring down their own fares.
In a recent interview with The , JetBlue chief executive Robin Hayes said combining operations would create an airline that can be “a disruptive presence able to appeal to a broader set of customers.” He added: “We’re doing this to grow. We’re not doing this to consolidate. We’re doing this to try and get bigger so we can better compete with the big four airlines.”
The suit will come as Justice Department attorneys are waiting on the outcome of their case against JetBlue’s partnership with American Airlines, which allows the carriers to coordinate schedules and share revenue on several routes between New York-area airports and Boston.
