By Chris Isidore, CNN
(CNN) — The US Justice Department is suing to stop JetBlue’s proposed $3.8 billion deal to buy discount carrier Spirit Airlines, the first time in more than 20 years that the government has sought to block a US airline merger.
The lawsuit is not a surprise. The Biden administration has argued since taking office there needs to be greater competition between businesses, especially in the airline industry, to lower costs for consumers. Spirit, with its low base fare business model that charges customers extra for everything, including carry-on bags, prompts larger carriers to offer a percentage of their seats the lowest possible price.
But over the last 22 years, the Justice Department has allowed a series of five airline mergers without a suit like the one announced Tuesday. Those deals turned nine major US carriers into four – American Airlines, United, Delta and Southwest. Between them, the airlines control about 80% of the nation’s air traffic.
JetBlue has vowed to press ahead with its merger efforts and hopes to defeat the lawsuit in time to still close its deal with Spirit by the end of the year. But it has been fighting a separate lawsuit from the Justice Department challenging an alliance it has with American Airlines for nearly 18 months.
The-CNN-Wire
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