Patrick Bet-David explains the shocking situation that recently took place with Spirit Airlines. JetBlue agreed to buy Spirit for $3.8 billion in a 2022 deal that would have created the country’s fifth-largest airline. US District Court Judge William Young blocked the merger, citing reduced competition. Did this decision hurt or help the free market?
On January 16th, it was announced that a federal judge in the District Court of Massachusetts blocked JetBlue Airways from acquiring Spirit Airlines for $3.8 billion. The judge ruled this was on the grounds that the deal “does violence to the core principle of antitrust law: to protect the United States’ markets – and its market participants – from anticompetitive harm.”
This decision was endorsed all the way at the top of the Biden administration’s legal food chain by US Attorney General Merrick Garland. “Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward,” he said. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers. I want to thank the Antitrust Division for their excellent work on this case.”
JetBlue was sued by the Department of Justice (DOJ), as well as California, Maryland, Massachusetts, New, Jersey, New York, North Carolina, and the District of Columbia under Section 7 of the Clayton Act in March 2023. The DOJ claimed the merger would ratchet up Spirit’s fares and thereby harm the consumer by eliminating the cheap and affordable option well-known to lower income people.
But what ended up happening is exactly what the antitrust lawyers wanted to avoid. After the decision, the value of Spirit’s shares tumbled by roughly 60 percent from where they were the previous week, leading to talk of debt refinancing. Now, the affordable option that is Spirit might close for good, and the costly airlines will continue to be seen as “too big to fail.”
Watch the rest of the video to learn more about Spirit’s fall and the downside of the anti-trust ruling system.
Shane Devine is a writer covering politics, economics, and culture for Valuetainment. Follow Shane on X (Twitter).