Judge blocks JetBlue takeover of Spirit Airlines
A federal judge on Tuesday blocked JetBlue from completing its $3.8 billion takeover of Spirit Airlines, agreeing with the U.S. Justice Department that the deal would be anticompetitive.
Why it matters: This is a devastating blow for JetBlue, the country's sixth largest airline, and its incoming CEO Joanna Geraghty.
- JetBlue previously was forced by DOJ to dissolve a partnership with American Airlines.
- Now it must figure out a third path to expand a business concentrated on the East Coast, without nearly as many business-class and first-class seats as its larger rivals.
Look ahead: Spirit originally favored a merger with rival budget carrier Frontier, although it's unclear if that pairing could be revived.
What they're saying: "There are no 'bad guys' in this case," the judge's ruling stated. "The two corporations are — as they are expected to — seeking to maximize shareholder value. The Department of Justice is — as the law requires -- speaking for consumers who otherwise would have no voice."
- He added: "Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one's for you. Why? Because the Clayton Act, a 109-year-old statute requires this result — a statute that continues to deliver for the American people."
Investor reax: JetBlue shares jumped around 12% on the news, before later giving back some of those gains, while Spirit stock is down more than 50%.
Read the ruling:
Editor's note: This story was updated with additional details.