JetBlue Airways and Spirit Airlines announced on Monday that they would not seek to overturn a court ruling that blocked their planned $3.8 billion merger. The decision is a big win for the Biden administration, which has sough to limit corporate consolidation.
Backing out of the agreement will cost JetBlue. Under the terms of the deal, it has to pay Spirit a breakup fee of $69 million and Spirit’s shareholders $400 million.
A federal judge in Boston blocked the proposed merger on Jan. 16, siding with the Justice Department in determining that the merger would reduce competition and give airlines more leeway to raise ticket prices. The judge, William G. Young of U.S. District Court for the District of Massachusetts, noted that Spirit played a vital role in the market as a low-cost carrier and that travelers would have fewer options if JetBlue absorbed it.
The Justice Department hailed the termination of the deal on Monday, calling it “a victory for U.S. travelers who deserve lower prices and better choices.”
Don’t let anyone tell you hipster antitrust has no teeth.
On the FTC side, Lina Khan is on a roll. Every little bit of the tide turning creates momentum, and thank god we have the EU setting an example, too.