JetBlue-Spirit Merger Blocked by Court, Rare Victory for Biden Antitrust Enforcers

U.S. District Judge William Young blocked JetBlue Airways’ $3.8 billion acquisition of low-cost rival Spirit Airlines on January 16, 2024, handing the Biden administration a significant victory in preserving airline competition. Judge Young ruled that the merger would harm competition and violate antitrust law, siding with the Department of Justice, California, Maryland, Massachusetts, New Jersey, New York, North Carolina, and the District of Columbia, which had sued to stop the merger in March 2023 under Section 7 of the Clayton Act. The ruling came after a 17-day trial that began in October 2023. Judge Young wrote that ‘JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers. The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.’ Under the merger agreement, JetBlue was required to pay Spirit shareholders $400 million if the deal wasn’t approved by regulators, plus another $70 million to the company. JetBlue abandoned the acquisition following the ruling. The victory was significant as one of the few successful merger blocks under the Biden administration, demonstrating that antitrust enforcement could succeed when enforcers could show clear harm to a specific customer segment (budget travelers) rather than relying on more theoretical potential competition or vertical integration harms. However, the rarity of such wins—compared to the routine approval of mergers during previous decades—highlighted how permissive merger policy had become and how difficult Khan and Kanter found reversing this trend.