JetBlue’s Fare Increase Strategy Poses Threat to Potential Spirit Airlines Merger

A redaction mistake has revealed that JetBlue had plans to hike Spirit Airlines’ fares following a merger of the two airlines. This development could potentially put the whole transaction in jeopardy.

According to a report by Law360 after travelers challenged the proposed JetBlue and Spirit Airlines merger, “improper redaction formatting” by the plaintiffs’ counsel revealed that the former planned to raise prices on the latter’s flights by up to 40%.

The United States (US) Department of Justice (DOJ), which sued to block the merger in March 2023, warned that JetBlue acquiring Spirit Airlines would reduce competition, resulting in increased fares and reduced choice for consumers. Furthermore, the DOJ pointed out that cost-conscious fliers would be affected most acutely.

The DOJ’s announcement of a lawsuit against the merger continued: “The deal also would eliminate half of the ultra-low-cost capacity in the United States. This will lead to higher fares and fewer seats, harming millions of consumers on hundreds of routes.”

Per the DOJ’s estimates, the problem would be exacerbated on 40 direct routes, “where the two companies’ combined market shares are so high that the deal is presumptively anticompetitive”.

In a statement to Skift, a JetBlue spokesperson said that the redaction mistake resulted in the information being taken out of context, which obscures the facts. “We are confident that our merger with Spirit will give a much-needed boost to airline competition in the U.S. and result in more low fares and higher-quality service for customers,” they added.

JetBlue first announced its planned merger with Spirit Airlines in July 2022. JetBlue had provided a better offer to Spirit Airlines’ shareholders – namely $3.8 billion in cash – compared to Frontier Airlines’ offer of $2.9 billion worth of cash and stock.

Since then, JetBlue has pledged to give all of Spirit Airlines’ assets at New York LaGuardia Airport (LGA) to Frontier Airlines, in a bid to appease regulators.

Previously, JetBlue and Spirit Airlines’ lawyers ridiculed another lawsuit by 25 plaintiffs, one of whom has since deceased since the filing in November 2022.

“Plaintiffs have a decades-long history of filing suits to enjoin mergers in the airline industry and others,” the airlines’ lawyers said in a filing in early August 2023.