Department of Justice Slams the Brakes on JetBlue and Spirit Airlines Merger
Mar. 06, 2023 11:22 AMKey Points
- Regulators are reportedly looking to halt the prospective merger between JetBlue Airways and Spirit Airlines.
- Both the Department of Transportation and Department of Justice are concerned about anti-competitive implications of the merger.
- A "last-rites" meeting in February failed to assuage regulatory concerns, with the DOJ planning to file a suit as early as this month.
- The Department of Transportation is launching a parallel proceeding to "block the transfer of Spirit's airline certificate."
- JetBlue Airways stock rises while Spirit Airlines stock slumps over 9%.
Spirit Airlines stock took a nosedive as news emerged that regulators may block the prospective merger between JetBlue Airways and Spirit Airlines.
The Department of Transportation and Department of Justice are looking to halt the deal on anti-competitive grounds. This news sent shares of Spirit Airlines sliding.
The Reason Why
The news follows a meeting between executives from both carriers and the DOJ in late February, where they tried to assuage regulatory concerns on the planned merger. Reports earlier in February suggested that the department was planning to file a suit against the merger as early as this month. However, these efforts to change the DOJ's stance on the deal have been unsuccessful, as a suit is indeed due to be filed as soon as Tuesday.
The Department of Transportation plans to launch a parallel proceeding to block the transfer of Spirit's airline certificate, as it is considered incompatible with the public interest. This is a power that the agency hasn't used since the deregulation of the industry under the Carter administration.
The Industry
The news had a mixed effect on the market, as shares of JetBlue Airways rose 2.22% in afternoon trading, while Spirit Airlines stock slumped over 9% before rebounding modestly. With the future of the merger in doubt, investors in both companies will be watching closely to see how this situation develops.
It remains to be seen how this regulatory action will impact the future of Spirit Airlines, but it is clear that the market is responding with caution
Institutions Holding SAVE
- # of Institutions 272
- Shares Held 43.4M
- Call Options Held 7.23M
- Put Options Held 28.8M
About Spirit Airlines, Inc.
- Ticker SAVE
- Exchange NYSE
- Sector Industrials
- Industry Airlines
- Shares Outstandng 108,857,000
- Market Cap $322M
- Description
- Spirit Airlines, Inc. provides airline services. It serves 85 destinations in 16 countries in the United States, Latin America, and the Caribbean. As of December 31, 2021, the company had a fleet of 173 Airbus single-aisle aircraft. It sells tickets through its call centers and airport ticket counters, as well as online through spirit.com; and t...