JetBlue Airways (NASDAQ: JBLU) shares declined almost 2% in the pre-market trading Wednesday after a federal judge halted its proposed $3.8-billion acquisition of ultra-low-cost carrier Spirit Airlines (NYSE: SAVE).
A federal judge on Tuesday put a stop to JetBlue Airways’ proposed $3.8 billion purchase of ultra-low-cost carrier Spirit Airlines. The judge sided with the U.S. Department of Justice, supporting their argument that the merger would jeopardize fair competition in the airline industry.
JetBlue’s legal team labeled the case a “misguided” challenge to unite the nation’s sixth- and seventh-largest airlines. The merged entity would have wielded a 10.2% share of the domestic market, currently dominated by four major airlines.
Spirit Airlines (NYSE: SAVE) shares plunged almost 13% in the pre-market trading Wednesday following a 47% drop on Tuesday in response to the court ruling. Meanwhile, JetBlue Airways (NASDAQ: JBLU) shares are trading at $5.13, marking a 1.75% decrease compared to the closing price on January 16.
U.S. District Judge William Young’s ruling in Boston is a triumph for the White House in a campaign to curb additional consolidation within the U.S. airline sector. The ruling also casts uncertainty on the feasibility of the recently proposed Alaska Air Group (NYSE: ALK) acquisition of Hawaiian Airlines.
President Joe Biden, who has made boosting airline competition a top priority, hailed the judgment as a win for consumers nationwide seeking reduced prices and expanded choices.
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