Major Airline Deal Collapses After Feds Step In

JetBlue Airways and Spirit Airlines have dropped their planned $3.8 billion merger after a federal court ruled the deal would hurt competition and drive up prices. The companies said they still believe the merger would be beneficial but agreed to drop a planned appeal after a Boston judge said it violated antitrust laws in response to a filing by the Department of Justice.

In an email to staff, JetBlue’s CEO, Joanna Geraghty, said, “The probability of getting the green light to move forward with the merger anytime soon is extremely low.” She added that uncertainty surrounding the merger was distracting the airline from its primary aim of returning to profitability.

Spirit CEO Ted Christie said he is disappointed because he felt that the merger could have challenged America’s biggest airlines, but expressed confidence that Spirit can survive regardless.

Analysts predict, however, that the low-fare company could now face a difficult future and may even be forced into bankruptcy as it tackles low demand and saw its share price fall by 14% in early March.

If the airline were to fold, the impact would be felt most acutely in the few airports it serves, including the Arnold Palmer Regional Airport (LBE) near Pittsburgh. Spirit Airlines is the only commercial airline to utilize the airport, and Gabe Monzo, its executive director, said it would be “devastating” if Spirit goes “belly up.”

The Pennsylvania Department of Transportation conducted a study in 2022 that found that Spirit Airlines contributed $100 million of Arnold Palmer’s $213.9 Million Revenue. Monzo said the airport would be “left in the lurch” if Spirit folded.

Professor Jase Ramsey of the Florida Gulf Coast University said Spirit’s collapse would significantly impact tourism in the Sunshine State as it serves Southwest Florida International Airport and is popular among tourists from northern states. “This isn’t good for us. South Florida really depends on them,” he said, adding that for families seeking low-cost vacations, this is their “go-to airline.”