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JetBlue, at trial’s end, urges judge to allow Spirit Airlines merger

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BOSTON (Reuters) – A lawyer for JetBlue Airways on Tuesday urged a federal judge to allow it to proceed with its planned $3.8 billion acquisition of Spirit Airlines and reject the U.S. Department of Justice’s (DOJ) bid to block the deal.

JetBlue attorney Ryan Shores at the end of a closely watched trial in federal court in Boston argued that the proposed merger was pro-consumer and key to creating a “viable, disruptive national challenge to the industry’s dominant airlines.”

The four largest U.S. carriers – United Airlines, American Airlines, Delta Air Lines and Southwest Airlines – control 80% of the domestic market. JetBlue and Spirit combined control about 8%, their lawyers say.

The DOJ has sought to block the merger, arguing that it would diminish competition by removing ultra-low-cost, no-frills Spirit from a market where it has acted as a disruptor, thereby causing fares to increase and flights to decrease.

But Shores said that unlike the largest airlines that are flourishing in the aftermath of the COVID-19 pandemic, lower-cost companies like JetBlue and Spirit have faced significant financial headwinds that would stifle their ability to meaningfully challenge the biggest airlines on their own.

“Future growth for the smaller, disruptive airlines is not possible without profit,” he told U.S. District Judge William Young in his closing argument. “Meanwhile, the legacy airlines will continue to pull away.”

The DOJ, along with Democratic state attorneys general from six states and the District of Columbia, sued in March to block the merger, which would combine the sixth- and seventh-largest U.S. airlines.

JetBlue has sought to ease U.S. regulators’ antitrust concerns by agreeing to sell off Spirit’s gates and slots at certain airports in New York City, Boston, Newark and Fort Lauderdale.

But the DOJ has said that those divestitures are not enough, and that if JetBlue takes over Spirit, passengers would suffer roughly $1 billion in net harm annually as fares increase and flight options decrease.

Young at a hearing in March said he felt an “obligation” to try to rule by year’s end.

(Reporting by Nate Raymond in Boston; Editing by Mark Porter)



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