JetBlue sinks to 12-year low as airline forecasts more losses, Spirit antitrust trial begins
JetBlue Airways stock tumbled to a nearly 12-year low Tuesday as the company forecast a loss for Q4 and heads to court to defend its acquisition of budget carrier Spirit Airlines, a purchase it argues is crucial to its future. Shares fell more than 10% Tuesday to $3.76 apiece. Spirit shares fell more than 12% to a three-year low. The U.S. Department of Justice sued in March to block JetBlue’s $3.8b all-cash purchase of Spirit, a deal the airline reached with the discounter in 2022 after a bidding war with rival Frontier Airlines. The deal would create the fifth-largest airline in the U.S. JetBlue argued it needs to buy Spirit to grow and better compete with giant carriers — American, Delta, United and Southwest — which control about three-quarters of the U.S. market and are products of megamergers themselves. The Justice Department, however, alleges that “the proposed transaction will increase fares and reduce choice on routes across the country, raising costs for the flying public and harming cost-conscious fliers most acutely.” JetBlue plans to remove seats from Spirit’s bright-yellow planes and outfit them with seatback screens to match JetBlue’s interiors. Spirit’s business model is based on packed planes, no-frills fares and fees for everything from seat assignments to carry-on luggage, while JetBlue has more amenities and fewer seats on board. The lawsuit is a test for President Joe Biden’s Justice Department, which has aggressively pursued antitrust cases with mixed results in the airline, health-care and publishing industries, among others. The trial starts Tuesday and is set to last about three weeks in US District Court in Boston. In May, the Justice Department won a lawsuit to undo a partnership between JetBlue and American Airlines in the Northeast, an alliance the airlines started dissolving in the summer. At the time, JetBlue said it would focus instead on acquiring Spirit, a deal it expects to close early next year.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2023-11-01/unaligned/jetblue-sinks-to-12-year-low-as-airline-forecasts-more-losses-spirit-antitrust-trial-begins
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JetBlue sinks to 12-year low as airline forecasts more losses, Spirit antitrust trial begins
JetBlue Airways stock tumbled to a nearly 12-year low Tuesday as the company forecast a loss for Q4 and heads to court to defend its acquisition of budget carrier Spirit Airlines, a purchase it argues is crucial to its future. Shares fell more than 10% Tuesday to $3.76 apiece. Spirit shares fell more than 12% to a three-year low. The U.S. Department of Justice sued in March to block JetBlue’s $3.8b all-cash purchase of Spirit, a deal the airline reached with the discounter in 2022 after a bidding war with rival Frontier Airlines. The deal would create the fifth-largest airline in the U.S. JetBlue argued it needs to buy Spirit to grow and better compete with giant carriers — American, Delta, United and Southwest — which control about three-quarters of the U.S. market and are products of megamergers themselves. The Justice Department, however, alleges that “the proposed transaction will increase fares and reduce choice on routes across the country, raising costs for the flying public and harming cost-conscious fliers most acutely.” JetBlue plans to remove seats from Spirit’s bright-yellow planes and outfit them with seatback screens to match JetBlue’s interiors. Spirit’s business model is based on packed planes, no-frills fares and fees for everything from seat assignments to carry-on luggage, while JetBlue has more amenities and fewer seats on board. The lawsuit is a test for President Joe Biden’s Justice Department, which has aggressively pursued antitrust cases with mixed results in the airline, health-care and publishing industries, among others. The trial starts Tuesday and is set to last about three weeks in US District Court in Boston. In May, the Justice Department won a lawsuit to undo a partnership between JetBlue and American Airlines in the Northeast, an alliance the airlines started dissolving in the summer. At the time, JetBlue said it would focus instead on acquiring Spirit, a deal it expects to close early next year.<br/>
