A group of consumers and flight attendants sued JetBlue Airways and Spirit Airlines, seeking to halt their planned $3.8 billion merger over concerns that it would eliminate one of the country’s last major discount air carriers.
The antitrust lawsuit, filed late Thursday, seeks an injunction permanently blocking the planned transaction, which would merge Spirit into JetBlue, allegedly giving the combined airline a chokehold over certain routes that neither one currently dominates.
“The nation would not only lose the competition of Spirit, but also the potential competition that JetBlue would provide by building its own national presence the old-fashioned way, by competing for passengers instead of buying them,” the complaint says.
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The transaction is also being investigated by the Justice Department, which is reportedly weighing whether to move against the merger.
JetBlue, the sixth-largest US airline, and Spirit, the seventh-largest, didn’t immediately respond to requests for comment Friday.
The suit, filed in the US District Court for the Northern District of California, also seeks to stop a related part of the deal, a side payment of $400 million allegedly given to Spirit’s shareholders as “hush money” so they wouldn’t object. Spirit investors approved the deal in October.
According to the complaint, Spirit’s position as a discount carrier that’s also large enough to compete against the major airlines makes it “unique” in the civil aviation sector.
Merging it into JetBlue would allegedly eliminate not only a significant player in the discount airline market but also a meaningful check on “abuses” by major airlines that have enjoyed an oligopoly since the “furious feeding frenzy of mega-mergers” reduced their number from eight to four.
