JetBlue and Spirit Merger Appeal Scheduled for Court Hearing in Late Q2 of 2024

The United States First Circuit Court of Appeal in Boston has scheduled a hearing for June to review the appeal by JetBlue Airways and Spirit Airlines against a federal judge’s decision to block JetBlue’s USD 3.8 billion acquisition of Spirit Airlines. This decision is a significant development in the ongoing legal battle between the airlines and regulatory authorities over the proposed merger, which aims to combine JetBlue, a major American carrier based in New York JFK, with Spirit Airlines, an ultra-low-cost carrier headquartered in Fort Lauderdale International.

The court’s decision to expedite the hearing, as indicated in an order dated February 2, emphasizes the urgency of the matter, with a clear directive that extensions to the set timeline will be strongly discouraged. The airlines, acting as defendants, are required to submit their initial brief by February 26, followed by a response from the plaintiffs — the United States Department of Justice, six states, and the District of Columbia — by April 11. The defendants’ reply to this response is due by April 25, setting the stage for the June hearing.

This appeal follows a concerted effort by JetBlue and Spirit to challenge the federal judge’s ruling that obstructed their merger, citing antitrust concerns. The airlines had sought an expedited appeal process, hoping for the court to hear their case as early as May, with the aim of securing a decision ahead of a critical July 24 deadline. This deadline is pivotal for the merger’s closure, tied to a financing condition worth USD 3.5 billion that is set to expire, unless extended by the lenders.

The timeline outlined by the court, however, reflects a slightly slower process than the airlines had anticipated. This delay presents a challenge to JetBlue and Spirit’s strategic plans, especially considering the pressing financing deadline. The Department of Justice’s preference for a June hearing, as reported by Reuters, suggests a belief that merger closing dates can be renegotiated to accommodate the judicial review of antitrust challenges. Despite this, the airlines have expressed concerns about the feasibility of renegotiating the merger’s financial arrangements within the existing contractual timeframe.

This legal standoff marks a critical juncture for the aviation industry, highlighting the complex interplay between corporate consolidation efforts and regulatory oversight aimed at preserving competition and consumer interests. As the June hearing approaches, stakeholders within and beyond the aviation sector will be closely monitoring developments, eager to understand the potential impacts of this high-stakes legal battle on the future of airline mergers and acquisitions.