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Preventing the JetBlue Spirit Merger Will Not Benefit Consumers


By Trey Price, American Consumer Institute

As summer vacationers know all too well, there is often a steep tradeoff between what is cheap and what is enjoyable, especially when it comes to airlines. What those same vacationers may not know is that in March 2023 the Justice Department issued a complaint to prevent the merger between two low-cost airlines, JetBlue and Spirit Airlines. The complaint alleges that the merger is designed to eliminate competition. For consumers, the deal could provide a low-cost travel option that has less of a tradeoff for affordability.

The Justice Department complaint argued that the acquisition would continue the trend of consolidation in the airline industry. Today the airline industry is dominated by legacy airlines or “the big four.” These include American Airlines, United, Delta, and Southwest. The smaller airline Spirit found a competitive edge by offering a lower-cost alternative by unbundling the cost of a ticket, meaning amenities that are usually included in the price of a ticket, such as in-flight snacks and carry-on checks, are sold separately.

Unbundling the ticket price allows Spirit to keep its airfare low. The low cost has influenced its competitors as shown by the “Spirit effect” which is when other airlines lower their prices to better compete.  

The Justice Department argues that the acquisition would deprive consumers of the Spirit effect. However, there is also a JetBlue effect. A study found that when JetBlue enters the market, airfare falls by an average of 21% due to increased competition. The Justice Department, while it acknowledges a similar JetBlue effect, argues that having both would benefit consumers by stacking the impact. The agency fails to consider that merger would allow the Spirit and JetBlue effect to spread more widely, by taking advantage of increased size and resources.

The Justice Department alleges that the acquisition will serve to eliminate Spirit as a competitor to JetBlue. However, Spirit Airlines argued that the merger would allow the combined companies to reach more markets and that they will be in a better position to challenge the big four. This would increase competition between airlines, not diminish it.

Spirit Airlines also points out how even after the merger, JetBlue will still be considerably smaller than any of the big four airlines with only 9% of the market share. According to Spirit, “the four largest carriers control more than 80% of the market. Creating a low-fare, customer-centric challenger with size and scale is the best opportunity to disrupt legacy carrier pricing in the current landscape.”

In its complaint, the Justice Department cited the alliance in the northeast region between JetBlue and American Airlines giving JetBlue access to American Airline’s routes and reciprocal loyalty benefits as an issue for the proposed merger. They argue that it represents a move towards the interests of the big four and a departure from their original goal of being a low-cost alternative.

The Justice Department is concerned that this will lead to JetBlue not competing with American Airlines in other markets as it grows following the potential acquisition of Spirit. However, JetBlue announced it was going to end that alliance. This in combination with their stated plans on challenging the big four further demonstrates their intent to better compete with the major airlines and invalidates a large portion of the complaint.

Much like the Federal Trade Commission’s (FTC) lawsuit to prevent the Microsoft-Activision merger, there is a gulf between what the government alleges will happen because of the merger and what the companies involved argue will happen.

In the Microsoft case, the courts found that many of the FTC’s concerns did not reflect the reality of the relevant market and the evidence suggests that the JetBlue case has the same problem. While the Justice Department’s complaint argues against the trend towards consolidation in the airline industry, consumers have benefited from the mergers in terms of fare, more seats, and increased availability especially in major travel hubs.

From 1995 to 2022 the average ticket price fell adjusting for inflation from $576 to $388. In addition, seat miles have been steadily increasing since 1950 even as airlines have merged, showing an increase in capacity for travelers. Based on these demonstrated consumer benefits, this lawsuit will likely be the latest in a series of losses by antitrust regulators.

As the case against the merger unfolds, the courts should consider the potential pro-competitive effects of a low-cost airline positioning itself to challenge the dominant companies in the field. Framing JetBlue as more aligned with the interests of the big four rather than a low-cost competitor trying to compete in more markets is a misguided way to promote competition among airlines and ultimately will disadvantage the consumer.


Trey Price is a technology policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information, visit or follow us on Twitter @ConsumerPal.