National Review Op-ed: Blocking the JetBlue–Spirit Merger Won’t Revitalize the Airline Industry
- Rachel Chiu
- Mar 15, 2023
- 1 min read
Updated: Apr 6, 2023
Op-ed in the National Review by Committee for Justice resident fellow for competition and regulatory policy Rachel Chiu:
Government officials are eager to “fix” the airline industry. Over the holidays, 2 million Southwest passengers were stranded in airports across the country, prompting a Senate hearing and calls for regulation. The Biden administration is, yet again, using antitrust to remedy a problem it is ill-suited to solve.
Now, the Department of Justice and Department of Transportation have taken action to halt JetBlue’s takeover of Spirit Airlines. Although the state of air travel could use some improvement, breaking up pro-competitive mergers and acquisitions is not the way to achieve that. By attempting to block the JetBlue–Spirit merger, regulators are effectively reinforcing the market power of larger airlines.
The companies announced in October that stockholders approved the $3.8 billion deal. Although the transaction depended upon the required assent from regulators, Spirit and JetBlue anticipated that they would allow the deal to close by the end of the first half of 2024, at the latest. JetBlue offered to divest from all of Spirit’s assets in New York and Boston, along with five gates in Fort Lauderdale, to prevent the airline from commandeering these regions. However, the divestiture commitments failed to appease the Biden administration, and according to JetBlue’s CEO, Robin Hayes, the DOJ staff “came to the table with their minds made up...”