In a trial antitrust in court, the CEO of JetBlue defended a mega-merger of 3.8 billion dollars with Spirit Airlinesclaiming that the big four US airlines control 80% ticket revenue.
JetBlue’s main goal in spending $3.8 billion to buy Spirit Airlines was to take on companies like American Airlines, Delta Air Lines, United Airlines and Southwest Airlinessaid Monday Robin HayesCEO of JetBlue Airways, to a judge in Boston during a trial over the federal government’s attempt to block the deal. He said the proposed acquisition of Spirit Airlines is a key part of his plan to make the airline a bigger competitor to the four largest U.S. carriers. He defended the agreement challenged by the United States. He said a merger is the only way to make JetBlue a long-term domestic challenger to the dominant airlines.
As a reminder, the Justice Department, along with Democratic attorneys general from six states and the District of Columbia, filed a lawsuit in March to block the merger, which would bring together the sixth and seventh largest airlines.
The four largest American carriers (United Airlines, American Airlines, Delta Air Lines and Southwest Airlines) control 80% of the domestic market, compared to around 5% market share of JetBlue, says Hayes. He has long believed that “consolidation among smaller airlines was in some ways inevitable to compete with larger airlines” and “the need for us to grow quickly and inorganically has never gone away.” “You will never get to size based on organic growth,” he demonstrated during a pleading by JetBlue’s lawyer, Ryan Shores. “ And let’s remember that they didn’t get there through organic growth either. They did this through mergers and acquisitions. »
The Justice Department has since countered that passengers would suffer a net loss of about $1 billion a year if JetBlue absorbed Spirit, which would result in higher fares.