Executives for JetBlue Airways Corp. and Spirit Airlines Inc. met with Justice Department officials Wednesday in a final bid to persuade the antitrust agency to approve their $3.8 billion merger, said people familiar with the matter.
(Bloomberg) — Executives for JetBlue Airways Corp. and Spirit Airlines Inc. met with Justice Department officials Wednesday in a final bid to persuade the antitrust agency to approve their $3.8 billion merger, said people familiar with the matter.
The agency is expected to decide whether to challenge the deal in the next several weeks, the people said, asking not to be named discussing a pending probe.
A meeting between the companies and the Justice Department’s top antitrust officials — who make the final call on whether to file a case — is one of the last steps before a lawsuit or a settlement is filed, often referred to as a “last-rites” meeting.
The agency, which has taken a more aggressive approach to mergers under President Joe Biden, is concerned the Spirit acquisition would eliminate a low-cost carrier, removing downward pressure on prices for all customers, even those who don’t frequently travel on discount airlines.
A Justice Department spokesperson and JetBlue declined to comment on the meeting. Spirit didn’t immediately respond to a request for comment.
Read more: JetBlue braces for DOJ decision as Spirit review nears end
JetBlue has offered to shed Spirit assets in Boston, New York and some parts of Florida to help secure federal support. The carrier confirmed that it’s in talks to sell those assets to other airlines on Friday, adding that any agreement would be contingent on the merger closing..
The airlines have acknowledged an antitrust challenge was possible; Spirit said last year while it was fending offers from both JetBlue and Frontier Group Holdings Inc. that a JetBlue deal could raise antitrust concerns. As a result, the merger agreement was crafted to allow time for at least nine months of litigation ahead of the deal deadline in 2024.
The lawsuit would mark the second against JetBlue by Biden’s antitrust lawyers, who are also seeking to unwind the airline’s alliance in the US Northeast with American Airlines Group Inc. A judge has yet to issue a decision in that case following a trial last year.
The proposed deal would make JetBlue the fifth-largest US carrier based on domestic passenger traffic. The airline hopes to lure passengers away from larger competitors with lower fares and better onboard service.
JetBlue argues its acquisition of Spirit would lead to lower fares, helping to provide an influx of aircraft and pilots, both currently in short supply, and to expand its network.
“You either accept a world where you have four large airlines who will call the shots with about 20% of the market each, and the rest of us have 20% between us,” JetBlue Chief Executive Officer Robin Hayes said in a February interview with Bloomberg. “Or you can create a true low-fair, high-quality national challenger to take on these guys.”
Politico previously reported on the DOJ’s meeting with the companies.
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