Judge Blocks JetBlue’s Takeover Of Spirit

A federal judge blocked JetBlue's $3.8 billion takeover bid for Spirit Airlines saying it would reduce airline competition and increase fare prices. Judge William G. Young of the U.S. District Court for the District of Massachusetts rejected JetBlue's contention that the merger would bring down prices overall because it would allow JetBlue to go toe-to-toe with American, Delta, United and Southwest. In the 109-page ruling Young sided with the DOJ who said the merger would instead merely allow JetBlue to behave the same way as its top-tier competitors while removing a low-cost option for travelers.

JetBlue told the court it planned to reconfigure the chock-a-block seating on Spirit's A320s to match its somewhat roomier layout, thus reducing the number of seats. The judge noted that JetBlue started as a scrappy low-cost alternative and becoming the country's fifth largest carrier would encourage it to "further to abandon its roots as a maverick, low-cost carrier.” He had some tender words of encouragement for Spirit. “Spirit is a small airline,” he said in the ruling. “But there are those who love it. To those dedicated customers of Spirit, this one’s for you.” Shareholders might disagree. Spirit stock lost more than half its value in early trading and only recovered to 0.53% of its Monday close of 14.97 by the bell on Tuesday. Some analysts say Spirit's only option is bankruptcy.