unaligned

A federal judge on Tuesday blocked JetBlue Airways’ proposed $3.8b acquisition of Spirit Airlines, a victory for the Department of Justice, which argued that the deal would harm travelers. In his 109-page ruling, Judge William G. Young of the U.S. District Court for the District of Massachusetts sided with the Justice Department in determining that the merger would reduce competition in the airline business. The proposed merger would have created the nation’s fifth-largest airline. The Justice Department argued that smaller, low-cost airlines like Spirit helped reduce fares and that allowing the company to be acquired by JetBlue, which tends to charge higher prices than Spirit, would have hurt consumers. The four largest US airlines — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines — control about two-thirds of the market. The merger would have given JetBlue a market share of 10%, still shy of United, the fourth-largest U.S. airline, which has 16%. Lawyers for JetBlue argued in court last month that the merger would allow it to better compete with the four large national airlines, bringing prices down overall. The Justice Department argued that a larger JetBlue would act just like its bigger competitors while taking away a low-cost option for travelers. Analysis presented at trial showed that when Spirit introduces a new route, fares, including those on JetBlue flights, come down. JetBlue planned to reconfigure tightly packed Spirit airplanes to match its own roomier layout, meaning it would reduce the number of seats. Judge Young agreed with the government, ruling on Tuesday that the merger would “likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier.” He said Spirit played an important role in the market as a small, low-cost alternative to large airlines. “Spirit is a small airline,” he said in the ruling. “But there are those who love it. To those dedicated customers of Spirit, this one’s for you.” President Biden hailed the ruling as a win for consumers in a post on the social media site X and said that his administration would aggressively enforce antitrust laws. <br/>

Spirit Airlines faces tough choices about its future including looking for another buyer and finding other ways to shore up its finances after a federal judge on Tuesday blocked its $3.8b merger deal with JetBlue Airways, industry experts said. The ultra low-cost carrier has been struggling to return to sustainable profitability amid rising operating costs and persistent supply-chain problems. That has raised concerns about the company's ability to repay its debt that is due to mature next year. The airline this month completed a series of sale and leaseback transactions covering dozens of planes in a bid to repay about $465m of debt on those jets. But with a recovery in earnings not in sight, some analysts said the company might consider a bankruptcy filing to clean up its balance sheet and reorganize into a financially stronger airline. Helane Becker, airline analyst at TD Cowen, said Spirit is likely to look for another buyer, but that a more likely scenario is a Chapter 11 filing, followed by a liquidation. She said the recent capital raise has given the company funds to self-finance a potential Chapter 11 filing. "We recognize this sounds alarmist and harsh," Becker said. "But the reality is we believe there are limited scenarios that enable Spirit to restructure."<br/>

WestJet is beginning to pick up the pieces of a disastrous travel weekend after cancelling more than 450 flights across its network due to record-low temperatures in much of Western Canada.<br/>WestJet is beginning to pick up the pieces of a disastrous travel weekend after cancelling more than 450 flights across its network due to record-low temperatures in much of Western Canada. Between Thursday and Sunday last week, WestJet cancelled 464 flights, which it attributed to ineffective de-icing fluid in extreme cold and problems with bridges and fuel stations. During that time, temperatures hovered between -40 C and -50 C in Edmonton — reaching -55 with the wind chill. The Calgary-based airline said Monday improving weather conditions should set the table for operations to stabilize. Cancellations in Calgary were still rolling in on Monday, however, with WestJet cancelling 33 flights out of YYC by the end of the day — the majority servicing flights to areas of Alberta and B.C. where poor weather was persisting. Over the past year, WestJet has asserted its prominence in Western Canada and made Calgary its hub city — meaning several connecting flights to larger ones flow through Calgary International Airport.<br/>

Brazilian airline Azul is going back to Argentina this year for the first time since pandemic-related travel disruptions forced the carrier to suspend its routes to the neighboring country in 2020. On June 30, Azul will launch a seasonal route connecting the Viracopos airport near Sao Paulo to Bariloche, a major winter destination in Argentina's Patagonia region that will be served by four weekly flights, it said in a statement on Tuesday. Argentina is a top international destination for Brazilians and travel to that country has been on the rise. Its extremely weak peso amid a major economic crisis made it cheaper for Brazilians to visit, with Argentine government data showing 1.27m Brazilians traveled to the country in 2023 through November, up 75% from the previous year. Rival Gol recently also bet on seasonal flights to Argentina to meet high demand, with routes connecting Brasilia and Belo Horizonte to Buenos Aires and Sao Paulo and Florianopolis to Cordoba during the summer season. "The new route is aimed at providing customers with another destination option for their July holidays," Azul manager Vitor Silva said, noting the company is "strong in domestic flights but continues to invest in new international destinations." Azul in December announced the purchase of seven Airbus A330neo wide-body aircraft to "significantly" expand international flights, with deliveries scheduled to start in 2026.<br/>

Ryanair has doubled the number of its engineers overseeing Boeing’s production lines following the manufacturing problems that have plagued the US plane maker.  The Irish airline, which is one of the largest customers of Boeing’s 737 Max narrow-body aircraft used for short-haul flights, increased the number of engineers it has on site at the US group’s production line just outside Seattle, from six to 12. Ryanair has also raised the number of engineers on the production line of Spirit AeroSystems, one of Boeing’s largest suppliers, from four to eight.  “We all as an industry want to be seen to be investing more in quality control and what is coming off the line,” said Ryanair CE Michael O’Leary on Tuesday.  O’Leary said Boeing had last week asked Ryanair to increase its oversight, and that the plane maker had also pledged to add more of its own engineers working on “quality control”.  “To be fair to Boeing, from last September they have significantly increased the number of engineers on quality control. I would have to say we have seen a marked improvement in the quality of aircraft deliveries,” he said.  Ryanair only flies Boeing aircraft, and has an order book of more than 400 new aircraft, made up of 737-Max 8 and the yet to be certified Max-10. The airline does not operate any Max 9 aircraft, currently the focus of a federal investigation after a damaging fuselage breach of an Alaska Airlines aircraft 11 days ago. The Federal Aviation Authority has grounded 171 of the Max 9 aircraft pending inspections of the production lines as well as suppliers. Boeing said on Monday it would allow customers of the Max into its factories to review its procedures as the plane maker scrambles to contain the fallout from the incident. <br/>