U.S. judge grounds JetBlue-Spirit merger; local airport official optimistic

The planned $3.8 billion merger of JetBlue Airways with Spirit Airlines was struck down Tuesday by a federal judge who feared it would hurt competition among low-cost airlines.

Spirit Airlines, based in Miramar, Fla., is the lone scheduled carrier serving Arnold Palmer Regional Airport in Unity.

“We are going to maintain our strong relationship with Spirit. We’re very proud of what we have been to date, and we’re hoping to increase our schedule with Spirit and looking for better things to come,” said Gabe Monzo, executive director of the Westmoreland County Airport Authority, which operates Arnold Palmer Regional.

U.S. District Judge William Young, who presided over a nonjury trial last year, said in the ruling Tuesday that the government had proved the merger “would substantially lessen competition” and violated a century-­old antitrust law.

“Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you,” Young wrote.

New York-based JetBlue, the nation’s sixth-largest carrier in terms of revenue, said it is considering an appeal.

After the judge’s ruling, JetBlue maintained its position that the merger would be the best opportunity “to increase much needed competition and choice.” It has said it needed the acquisition to compete with the nation’s larger airlines that dominate the air travel market.

Spirit did not respond to a request for a comment.

While the judge ruled against the merger, Spirit said in a recent filing with the Securities and Exchange Commisison that the current merger agreement with JetBlue has automatic extensions to July 24, 2024. Under certain circumstances not specified in the filing, Spirit will have to pay JetBlue $94 million if the merger is terminated.

The Justice Department did not immediately respond to a request for comment.

Spirit, the nation’s largest low-cost airline, serves both Arnold Palmer and Pittsburgh International Airport. JetBlue also serves Pittsburgh International.

Spirit flies from Arnold Palmer to Orlando, Fla., and has seasonal flights to Myrtle Beach, S.C.

Spirit dropped service to Fort Lauderdale and Tampa, Fla., resulting in the number of passengers arriving and departing Westmoreland’s airport to decrease to 142,635 from January through November 2023, an almost 40% decline from 234,563 for the same period in 2022, according to the Airport Traffic Record.

The Westmoreland airport authority will continue to monitor developments, Monzo said. He declined to speculate on what might happen with future service to the airport or whether, with its planned terminal expansion project on the horizon, this could open up the airport for service from another airline.

Pittsburgh International Airport declined to comment in detail on the judge’s decision opposing the merger.

“We have a great relationship with both airlines,” said Matt Neistein, an airport spokesman. “We will do whatever is in the best interest of passengers in Western Pennsylvania.”

The Justice Department, along with attorneys general from six states, had claimed the merger would result in fewer flights and higher fares.

Opponents of the merger argued that, if JetBlue acquired Spirit, which competes for customers seeking low-cost no-frills flights, it would extinguish a source of low-cost competition along more than 375 routes.

JetBlue jumped into the battle for Spirit in April 2022 after ultra-low cost Frontier Airlines sought a merger with Spirit in February 2022 with a $2.9 billion cash and stock swap. JetBlue continued to sweeten its offer to Spirit, and by July 2022 the proposed deal with Frontier was terminated.

Spirit’s stock took a beating with the announcement that the deal was blocked, losing 47% of its value in a plunge to $7.92 a share by the closing of the New York Stock Exchange. JetBlue shares, on the other hand, rose about 5% to $5.13 a share.

The Associated Press contributed to this report.