Early today, substantial rumors were being floated around that the United States Department of Justice would likely file an antitrust lawsuit today to stop the merger of Spirit Airlines with JetBlue Airways. This morning, the lawsuit was filed at a district court in Massachusetts.

DOJ sues

According to Attorney General Merrick Garland,

“This merger will limit choices and drive up ticket prices for passengers across the country."

The lawsuit claims that in the past, JetBlue disrupted the big four carriers (American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines) in the United States but that today, the New York-based carrier has just become another ally for the giants.

As a result, the DOJ has sued to block the Northeast Alliance JetBlue has with American Airlines and is now attempting to stop its merger with ultra-low-cost carrier Spirit Airlines. The DOJ states that three-fourths of JetBlue's capacity is part of the alliance with American and says,

“That means JetBlue today coordinates its capacity decisions and shares its revenues with American Airlines on the vast majority of its flights. In other words, JetBlue no longer competes with American Airlines on those flights — and if this acquisition happens, Spirit won’t either.”

JetBlue and Spirit respond

JetBlue and Spirit wasted no time in responding to the DOJ's lawsuit. Early this morning, a press release from JetBlue said the two airlines would continue to advance their plan... JetBlue claims the big four carriers hold approximately 80% of the market share in the US, and no one has been able to challenge them, but the merger would allow the two carriers to do so.

Robin Hayes, JetBlue CEO, said,

We believe the DOJ has got it wrong on the law here and misses the point that this merger will create a national low-fare, high-quality competitor to the Big Four carriers which – thanks to their own DOJ-approved mergers – control about 80% of the U.S. market. There is too much at stake for the DOJ to prevent us from bringing the JetBlue difference to more customers in more markets.”

Merging the Spirit and JetBlue networks would give the new airline about 10% of the market share, less than what each of the big carriers currently has. Still, the DOJ is adamant about blocking this deal. Ted Christie, CEO of Spirit, also had something to say,

“We disagree with the DOJ’s decision to seek to block the proposed merger, which will benefit consumers and employees. We will vigorously defend our position that a combined JetBlue and Spirit will be a game changer for customers nationwide, creating the most compelling national low-fare challenger to the dominant U.S. carriers. Together, we intend to democratize flying for travelers across the country – a goal we believe is worthy of the government’s support.”

JetBlue has negotiated with Florida's government and secured support for its merger with Spirit, stating that jobs will be added and all facilities from both airlines in the Sunshine State will remain open. To build a strong case for the merger, employees from both airlines have sent countless letters to the Department of Transportation (DOT) echoing their support.

In today's press release, JetBlue outlined a rationale for the merger:

• JetBlue is 3x more effective than Spirit at bringing down competitor fares
• JetBlue's award-winning customer experience will reach more customers
• The combination will unlock long-term opportunities to add more destinations and routes that otherwise would not be possible
• JetBlue and Spirit together will still be much smaller than any Big Four carrier
• JetBlue and Spirit primarily compete with other carriers, not each other
• JetBlue has offered unprecedented upfront divestitures to ensure ULCC growth
• JetBlue will expand sustainability leadership

What do you think will come of this lawsuit? Let us know in the comments below.