JetBlue Airways Corporation and Spirit Airlines Inc have taken their fight to merge to a U.S. appeals court in an attempt to reverse a previous court decision that halted their proposed $3.8 billion merger. The appeal comes after the U.S. Department of Justice challenged the legality of the merger and its potential impact on market competition.
According to Reuters, the airlines argue that the merger would actually strengthen competition and lead to lower prices for consumers. They believe that the acquisition of Spirit would allow JetBlue to expand its operations significantly, making it a strong competitor against the four major airlines that currently dominate U.S. air travel.
Despite the potential benefits of the merger, U.S. District Judge William Young ruled against the deal on January 16, citing concerns over federal antitrust laws. Young expressed concerns about the potential harm to consumers by removing Spirit’s low-cost options and competitive pressure on other airlines with higher fares.
The legal battle is expected to continue, with the Justice Department set to present its counterarguments on April 11. The appeals court has scheduled hearings for June, ahead of the July 24 deadline for the companies to finalize their merger agreement.
This appeal follows an antitrust lawsuit initiated by the Justice Department, supported by Democratic attorneys general from six states and the District of Columbia. The lawsuit argued that the merger would reduce flight options and increase prices for millions of American travelers.
In an effort to address regulatory concerns, JetBlue had previously agreed to divest certain assets, including gates and slots at key airports in New York City, Boston, Newark, and Fort Lauderdale.
It remains to be seen how this legal battle will unfold and what the ultimate outcome will be for JetBlue and Spirit Airlines. The future of the proposed merger hangs in the balance as the airlines continue to fight for their deal to go through.
