Photo Credit: Spirit Airlines
Consumers Challenge Merger Between JetBlue And Spirit
The $3.8 billion merger between JetBlue and Spirit hasn’t fared well with the government and now it seems to be unfavorable among customers also.
Concerns Over JetBlue/Spirit Merger
Recently a group of customers and flight attendants joined forces to sue JetBlue and Spirit, seeking to block their merger into one company. The merging of Spirit into JetBlue could allegedly run the risk of becoming a monopoly among economy airfares in the airline industry.
Statement From Consumers
“The nation would not only lose the competition of Spirit, but also the potential competition that JetBlue would provide by building its national presence the old-fashioned way, by competing for passengers instead of buying them,” the complaint says.
The Justice Department Investigates
Since the merger’s inception, the Justice Department has also been investigating the deal with the intent of determining whether or not to block the merger.
The lawsuit, which was filed in California’s US District Court, is looking to cease a part of the deal that includes a payment of $400 million to Spirit’s shareholders as “hush money.” Spirit investors already approved the deal in October.
No More Discounts?
The complaint states that Spirit’s position as a discount carrier that’s large enough to compete against top-tier airlines makes it “unique.” A merger with JetBlue would have the potential to make discount fares obsolete.
“Spirit, with its innovative, low-cost service, is an important bulwark against this almost unstoppable trend toward complete concentration and monopoly in the airline industry,” the suit says.