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U.S. Department of Justice to Block Jet Blue Spirit Merger, Sources

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WASHINGTON — According to the Bloomberg news agency, the United States Justice Department and Department of Transportation will make a move today to thwart JetBlue Airways' $3.8 billion acquisition of Spirit Airlines. (www.airlinerwatch.com) More...

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trajanmcgill
Trajan McGill 13
Yeah...the advertised price of Spirit Airlines may be only $3.8 billion, but be careful, JetBlue management team. There will be a fee to bring your lawyers into the office, another to bring their laptop bags, a fee to sit at a desk, a fee to adjust your office chair, a fee for closing the blinds on the windows, and another for photocopying the closing documents...this is going to be a $5 billion acquisition before you are done. You're going to be like the poor folks who spot a Spirit ticket for the price of a Greyhound ticket and think they can afford to fly this time! And then show up at the airport and their whole family vacation budget is blown just getting on the plane. The DoJ is probably just saving you a lot of trouble.
boughbw
boughbw 12
When Spirit and Frontier were examining a merger, it made sense because the two share a similar philosophy for pricing. But when JetBlue got involved, I saw something much different. JetBlue saw the opportunity to pick up a bunch of A320 series aircraft by buying an airline for much less than the cost of the aircraft alone (190 A320s of various types at a bit over $100 per plane for about $20 billion maybe?). Factor in the time slots and available routes under consideration and the move meant abandoning Spirit's price scheme in favor of JetBlue's, but also instant expansion for JetBlue. It is a shrewd business decision. However, I think the qualms expressed by DOT and DOJ are probably also accurate -- it will mean fewer options for customers and higher prices. It is hard to say what the correct balance is, but really Congress needs to draw lines for the industry so that the actions by DOT and DOJ appear less subjective when they are undertaken.
miami53
miami53 8
Creating the fifth largest airline seems like a very low bar for invoking anti-trust. In my opinion, anti-trust should only be used to block mergers that create monopolies on a national or regional level. It should not be used to support the cheapest provider of any good or service, particularly one that delivers such poor quality to the US consumer.
casey0999
Scott Sample 4
Airline mergers have generally not been good for the consumer - well done!
bobluvskristi
Bob Thomas 2
So here's a great example of a man (or woman?) sticking his nose where he don't belong. Buttigouge don't even know how to call a cab much less how to run DOT and anytine E. Warren is involved, people should be wary.
ImperialEagle
ImperialEagle 2
Well, I'm sure the regular Jet Blue clientele can breathe a little easier.
admiral506
wayne holder 2
I don't see the issue since Continental was swallowed up by United and US Airways merged with American.
Its what happens in business and you cant say JB would be a monopoly. I believe it will actually be better for consumers.

wd73383
WD Rseven 2
"The lawsuit would argue that the elimination of Spirit Airlines would lead to higher fares and fewer choices for passengers.
"
Of course! Isn't that the purpose of an acquisition or so-called "merger", to raise prices and provide fewer choices?

It is obvious someone hasn't kept up with their bribery payments.
longeronconsultingllc
Jeffrey Kelley 2
Why would they want to block this merger, they should have blocked all the mergers that Doug Parker (former AA CEO) orchestrated over his worthless career. He ruined the US airline industry.
longeronconsultingllc
Jeffrey Kelley 1
Why would they want to block this merger, they should have blocked all the mergers that Doug Parker (former AA CEO) orchestrated over his worthless career. He ruined the USA airline industry.
dmedlam
dmedlam -7
So this block isn’t because the department of transportation has thoroughly reviewed and studied the matter and determined it to be detrimental to the traveling public… it’s because one California senator whispered a favor in the ear of her butt buddy up in DC that he should block the merger. Just another example of California screwing things up for the rest of the country.
trwilson
Todd Wilson 6
Except the Senator is from Massachusetts.
SmittySmithsonite
SmittySmithsonite 0
MA ... CA ... same cartel, different geographic location.
jeliop
John Eliopoulos -2
Communism.
harriergnawing0c
Stef Lar 2
I’d be happy to have the country run like a company if it meant we could liquidate all the states whose federal funding exceeds federal tax revenue. If companies can axe unprofitable divisions, then USA Co. should be able to axe unprofitable states.

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