Over three decades ago, JetBlue Airways Corp (NYSE: JBLU) and Spirit Airlines Inc (NYSE: SAVE) were sued by the Justice Department for unlawfully coordinating fares. The trial finally ended on Friday, with the judge hinting that the acquisition could go ahead under some circumstances.
During the closing arguments of the trial aimed at deciding the outcome of JetBlue Airways' proposed $3.8 billion purchase of Spirit Airlines, U.S. District Judge William Young suggested that the deal could move forward if JetBlue consented to relinquish additional assets.
The judge summarized that it was difficult to agree with the Justice Department's request to block the deal in a "dynamic industry facing unique opportunities and challenges in the post-Covid environment," leaving it unclear which way he would lean in the non-jury trial in Boston. However, he asserted that if the two low-cost carriers combined, prices would inevitably increase.
JetBlue has already offered to divest gates and slots at Boston, New York Newark, and Fort Lauderdale International to quell antitrust concerns. The Justice Department, six states, and the District of Columbia sued to challenge the merger in March as harmful to competition.
JetBlue's lawyer, Ryan Shores, urged that any remedies the court imposes should be narrow and that consumers would see the benefits JetBlue promises, such as more competition with bigger airlines, within two or three years.
JBLU Stock Price Action: JetBlue Airways' stock is down 26.97% over the past year. However, the past five days have seen the stock recover about 17% from established lows.
SAVE Stock Price Action: Spirit Airlines' stock is down 26% over the past year, although shares have rallied 45% over the past month.