Analysis: JetBlue faces 'uphill battle' in merger fight with government

The US Justice Department's complaint aimed at stopping JetBlue Airways from buying rival discount carrier Spirit Airlines will force the companies to explain why very high market shares on some routes will not mean higher prices for consumers. The government filed the lawsuit on Tuesday, saying the planned $3.8b acquisition "will lead to higher fares and fewer seats, harming millions of consumers on hundreds of routes." The U.S. Justice Department argued JetBlue was losing its reputation as a maverick, low-price carrier as it grew and that Spirit was poised to expand, posing a bigger threat to other airlines. It also said JetBlue and Spirit were "especially close and fierce head-to-head competitors" on such routes as Boston to Miami/Fort Lauderdale, where they had about half the market and Boston to San Juan, Puerto Rico, where they had nearly 90%. In court, JetBlue is expected to argue that the deal would create a sort of super-maverick that would at least slow price increases in the sector. It will likely reiterate it has just 9% of the national market and point to planned asset sales in Boston and elsewhere as a way to resolve antitrust concerns. JetBlue will face "an uphill battle" as it fights the government," said Diana Moss, president of the American Antitrust Institute. She added that showing an airline merger is illegal is "not rocket science." "It's a solid complaint. Whether they win or not - goodness, who knows," agreed Bill Kovacic, a former chair of the Federal Trade Commission. Several legal experts interviewed stopped short of saying which side they thought would prevail in court. Analysts have said the lawsuit has cast a chill over future airline deals, at least during the Biden administration, but companies will still kick the tires on deals as they push for growth and to manage costs.<br/>