From the outside, it looks like a simple case between two businesses.
JetBlue Airways wants to merge with Spirit Airlines. A United States District Judge in Boston will decide whether or not the two can conduct business together. Sounds like a simple, cut-and-dried decision, right?
It’s not.
U.S. District Judge William Young will likely shape the future of the industry in a case that is being closely watched by the aviation world.
JetBlue paid $3.8 billion for the right to acquire Spirit. But the U.S. Justice Department filed a lawsuit to block the merger, saying it violates monopoly laws and would drive prices up for low-cost carriers. However, JetBlue argues that it’s the only way it can compete with the Big Four airlines.
If the merger goes through, it would create the fifth-largest airline in the United States.
One of the attorneys for JetBlue, Jay Cohen, says otherwise. He believes a merger would only help other low-cost carriers like Allegiant and Frontier.
“The evidence will demonstrate that these airlines are experiencing rapid growth and are positioned for even more substantial expansion if given the opportunity,” he said.
What makes this case so unique is that it is precedent-setting. This is the first time a potential merger between airlines has been presented before a presiding judge. The case is expected to last approximately three weeks.
In an era when United, Delta and American have all successfully had mergers without going before a judge, this will either embolden or deter other airlines from merging. But under the Biden administration, there has been more scrutiny on whether a company has violated antitrust laws.
One of the government attorneys, Arianna Markel, argued on the opening day of the trial Tuesday that the loss of Spirit would deprive consumers of a viable, low-cost alternative.
“Bigger isn’t always better,” she said. “It isn’t better for consumers or better for competition. A larger JetBlue means fewer seats, fewer planes, higher fares, and fewer choices.”
This is what the judge must decide, ultimately.
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