JetBlue’s Next Court Date With DOJ Pushed Back, In Spirit Merger Suit

The trial challenging JetBlue Airways’ proposed acquisition of Spirit Airlines is delayed by one week.

Originally scheduled to begin Oct. 16, it will now kick off on Oct. 23. The jury-waived trial, being held in Boston before U.S. District Judge William G. Young, was rescheduled “due to criminal trials to be held prior to the commencement of this matter,” a filing states.

In its suit to block the merger, the U.S. Justice Department (DOJ) contends that a combined Spirit and JetBlue would eliminate “about half” of all ULCC seats in the industry, calling the carriers “two of the most significant rivals today.”

JetBlue has maintained that the merger is pro-consumer and—should it be allowed to proceed—has committed to divesting Spirit’s assets at New York LaGuardia to Denver-based ULCC Frontier Airlines, and at Boston Logan and Newark Liberty to Las Vegas-based ULCC Allegiant Air, in addition to relinquishing up to five gates at Fort Lauderdale to the Broward County Aviation Department.

“Our divestiture commitment, while not needed to ensure the continued growth of the vibrant ultra-low-cost carrier segment, is aimed at removing any doubt of our commitment to promoting competition,” JetBlue CEO Robin Hayes said Sept. 11.

JetBlue announced in April 2022 an intent to acquire the Fort Lauderdale-based ULCC. Initially, Frontier had sought to merge with Spirit, a deal announced in February 2022 and terminated in July 2022 for lack of shareholder support after JetBlue sparked a bidding war.

When the trial begins, it will be the second time in recent months JetBlue has faced DOJ in court. Earlier in 2023, DOJ won an antitrust suit, ordering the cessation of JetBlue’s Northeast Alliance with American Airlines. Though American has filed an appeal, JetBlue chose not to contest the decision, stating that the termination of the partnership would render another DOJ concern in the Spirit case “entirely moot.”

Under terms of the proposed deal, JetBlue would acquire Spirit for $33.50 to up to $34.15 per share in cash dependent on timing, including regular payments of 10 cents per share per month it has been making to Spirit Shareholders since the start of the year and will continue to make until the transaction is closed or terminated. Should the deal fall through for antitrust reasons, JetBlue has agreed to pay Spirit a “reverse break-up fee” of $70 million and the stockholders would be set to receive $400 million less any amounts paid prior to termination. JetBlue has projected that a combined company with Spirit would have annual revenues of approximately $11.9 billion. The New York-based carrier reported operating revenues of $8.1 billion in 2019, and $9.2 billion in 2022.