Spirit customers sue to block merger with JetBlue

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Spirit, JetBlue merger lawsuit overview: 

• Who: A group of Spirit Airlines customers filed a lawsuit against Spirit Airlines Inc. and JetBlue Airways Corporation. 
• Why: Spirit customers claim JetBlue’s proposed acquisition of Spirit would substantially lessen competition and create a monopoly in the passenger airline industry. 
• Where: The class action lawsuit was filed in California federal court. 

JetBlue’s proposed acquisition of Spirit Airlines would substantially lessen competition or “tend to create a monopoly” in the passenger airline industry, a new antitrust lawsuit alleges. 

A group of Spirit customers claim the proposed acquisition by JetBlue of Spirit would be a violation of Section 7 of the Clayton Antitrust Act. 

Spirit customers argue that JetBlue ultimately made an “unsolicited tender offer to purchase Spirit in order to eliminate that competition.” 

“JetBlue would gain a majority market share on more than a dozen routes where neither it nor Spirit previously dominated and it would eliminate the price-cutting by Spirit,” states the Spirit merger lawsuit. 

Spirit customers claim Spirit’s Board initially recognized that the offer by JetBlue could “never be approved by regulators” for a number of reasons related to anti-competitive conduct and was therefore “illusory.” 

Spirit’s board had initially recognized that a merger would “substantially raise fares for consumers” and “have lasting negative impacts on customers,” among other things, according to the JetBlue merger lawsuit. 

JetBlue offered to pay Spirit shareholders $400 million to ‘sweeten the deal,’ says antitrust suit

JetBlue, however, responded by choosing to “sweeten the deal” by offering to pay $400 million to shareholders, even in the event “the proposed combination failed to go through,” the JetBlue merger lawsuit alleges. 

“In the face of Spirit’s assertions of numerous anti-competitive conduct and substantive and unequivocable lessening of, and probable destroying of, competition, JetBlue simply offered more money to Spirit,” states the Spirit merger lawsuit. 

Plaintiffs are demanding a jury trial and requesting a permanent enjoinment keeping JetBlue from consummating the acquisition of Spirit, declaring void any agreement to pay Spirit shareholders $400 million, and declaring the merger contract between JetBlue and Spirit to be null and void. 

In March, a group of lawmakers and interest groups sent letters to U.S. Department of Transportation heads and the U.S Department of Justice’s antitrust division over their concerns about a then-planned $6.6 billion merger between Spirit and Frontier Airlines. 

Are you concerned about JetBlue’s proposed acquisition of Spirit Airlines? Let us know in the comments! 

The plaintiffs are represented by, among others, Joseph M. Alioto and Tatiana V. Wallace of Alioto Law Firm.The Spirit, JetBlue merger lawsuit is Garavanian, et al. v. JetBlue Airways Corporation, et al., Case No. 4:22-cv-06841, in the U.S. District Court for the Northern District of California.

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