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“We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines,” Joanna Geraghty, chief executive officer of JetBlue said in a statement. “We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently. We wish the very best going forward to the entire Spirit team.”
In a filing with the Securities and Exchange Commission, Spirit acknowledged the two parties have reached an agreement to terminate their plans to merge.
The two carriers had been in the midst of appealing a federal court judge’s ruling in January that blocked the $3.8 billion transaction. However, JetBlue’s announcement was not a complete surprise. Shortly after Young’s decision, JetBlue executives hinted they might not appeal the case but received strong pushback from Spirit.
In his 113-page decision, Young wrote that while a combined JetBlue-Spirit carrier could put pressure on the four big airlines that dominate the industry, it would hurt consumers who rely on Spirit’s low fares. He noted that when Spirit enters a market, rival airlines reduce their prices by 7 percent to 11 percent on average.
Young’s decision was a significant victory for the Biden administration in its effort to preserve competition in a key industry that critics say has grown too concentrated.
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