JetBlue-Spirit Airlines Merger Called Off - NerdWallet (2024)

JetBlue Airways announced its decision to abandon its $3.8 billion merger with Spirit Airlines this week following an antitrust lawsuit. JetBlue will pay $69 million to Spirit to end the deal.

This announcement comes after a federal judge in Massachusetts blocked the acquisition for violating antitrust law in January. The airlines swiftly appealed the decision, and the hearing was scheduled for July. Both airlines cited the legal and regulatory difficulties as the merger’s July 24 deadline approached.

“After discussing our options with our advisors and JetBlue, we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement,” Spirit president and CEO Ted Christie said in a statement.

JetBlue published its own statement.

“Given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently,” said JetBlue CEO Joanna Geraghty.

The merging of small U.S. airlines

Spirit Airlines is an ultra low-cost carrier in the U.S., operating 500 flights per day to 90 destinations across the country and the Caribbean, Mexico, and Central and South America. JetBlue, on the other hand, is considered a low-cost carrier, operating 1,000 flights per day to over 100 destinations. It operates in 26 countries across the same regions as Spirit, as well as the U.K. and Europe.

The two airlines announced the proposed merger in July 2022, but the U.S. Department of Justice (DOJ) sued in March 2023. The DOJ alleged that JetBlue acquiring Spirit would lead to limited choice and higher fares on competitive routes. Meanwhile, the airlines argued the merger would allow them to better compete with bigger full-service carriers.

Notably, JetBlue and American Airlines also ended their Northeast Alliance partnership in 2023 following a legal challenge from the DOJ alleging anticompetitive conduct.

What this means for travelers

More competition in the airline industry helps keep fares lower for all travelers, not just budget travelers. The U.S. airline market is already concentrated among four major airlines: American, Delta, Southwest and United.

The "Big 4" control more than 80% of the industry. Had this merger gone through, JetBlue would’ve become the fifth-largest carrier in the country, potentially resulting in fewer routes and higher fares, according to the original DOJ filing.

“We know that the biggest threat to cheap flights is decreased competition, which the DOJ acknowledged in its ruling against the merger. Even if consumers don't fly on low-cost carriers like Spirit, they help to keep fares lower by putting pressure on the legacy carriers," Katy Nastro, a spokesperson at travel deals site, Going.com, said via email.

(Top photo courtesy of JetBlue Airways)