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JetBlue, Spirit airlines end plans to merge

Facing stiff opposition from the Biden administration, the two budget airlines no longer plan to merge following a January court ruling.
JetBlue, Spirit airlines end plans to merge
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JetBlue and Spirit Airlines announced Monday they are no longer planning to merge after facing opposition from the Biden administration. 

In January, a federal judge sided with the Biden administration, which filed a suit to stop the merger. The Biden administration said that the merger violated antitrust laws and would hurt consumers. 

Although the companies said they disagreed with the ruling, they opted not to try to fight it. 

“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” said Joanna Geraghty, JetBlue CEO. “We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently. We wish the very best going forward to the entire Spirit team.”

SEE MORE: US sues to block $24.6B merger of grocery giants Kroger and Albertsons

JetBlue said it will pay Spirit $69 million to finalize outstanding matters related to the transaction. 

Spirit Airlines said it will look to restructure its debt following the failed merger in hopes of returning to profitability.

"Throughout the transaction process, given the regulatory uncertainty, we have always considered the possibility of continuing to operate as a standalone business and have been evaluating and implementing several initiatives that will enable us to bolster profitability and elevate the guest experience," said Spirit CEO Ted Christie. "As we go forward, I am certain our fantastic Spirit team will continue delivering affordable fares and great experiences to our guests." 

The failed merger comes as the Biden administration has scrutinized the joining of major companies. The government has also objected to a recent attempt to merge grocery giants Kroger and Albertsons. 

Although there are other airlines out there, the government expressed concerns that merging two of the most affordable airlines would cause fares to increase. 

“Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward,” Attorney General Merrick Garland said in January. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers. I want to thank the Antitrust Division for their excellent work on this case.”

The Justice Department said the merger would have led to "fewer seats and higher prices for travelers."


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