U.S. rejects JetBlue, Spirit exemption request, citing lawsuit

By David Shepardson

WASHINGTON (Reuters) -The U.S. Transportation Division on Friday denied an exemption request by JetBlue and Spirit to function beneath frequent possession, citing the Justice Division’s antitrust lawsuit filed this month in search of to dam the deal.

JetBlue’s deliberate $3.8 billion acquisition of ultra-low price service Spirit was introduced final July. They then filed an exemption utility asking the Transportation Division to allow them to function beneath frequent possession previous to a requested switch utility that seeks approval to mix and function worldwide routes beneath one certificates.

The Justice Division on March 7 challenged the deal, saying it will remove competitors, result in greater ticket costs, scale back passenger capability and shrink shopper decisions.

The Transportation Division stated it rejected the exemption request in mild of President Joe Biden’s government order that it “coordinate competitors efforts, DOJ’s (Justice Division) conclusion that the proposed merger would have anti-competitive results, and the pendency of the federal lawsuit difficult the legality of the transaction.”

JetBlue stated in an announcement it believes a court docket “will acknowledge the pro-competitive deserves of this mixture, which is able to create a nationwide low-fare challenger to the dominant Large 4 airways.”

The Transportation Division resolution on the exemption “doesn’t change that perception or our confidence that we are going to shut the transaction, inside our anticipated timeframe, following completion of the court docket case,” JetBlue added.

The Transportation Division stated it discovered the exemption request was untimely given the continuing lawsuit. A federal choose this week set an Oct. 16 trial within the lawsuit.

The Justice Division, which sued alongside the states of Massachusetts and New York in addition to the District of Columbia, concluded that the deal was “presumptively unlawful” and that JetBlue deliberate to take away 10% to fifteen% of seats from each Spirit aircraft.

JetBlue CEO Robin Hayes has denied that the merger would cut back capability.

“This argument that we’ll take seats out and fares are going to go up – we’ll put capability again,” Hayes stated in an interview this month, by doing issues similar to utilizing bigger planes on current routes and by flying planes extra typically.

“It is good for customers,” Hayes added stated. “It’s going to shake up the airline trade, and so it must be authorized on an expedited foundation.”

The case is separate from a still-pending antitrust lawsuit the Justice Division additionally filed in Boston that seeks to pressure American Airways (NASDAQ:) and JetBlue to scrap their U.S. Northeast partnership as a result of it will imply greater costs for customers.