US Justice Department sues to block JetBlue-Spirit airline merger

New York: The US Justice Department on Tuesday sued to block the $3.8 billion JetBlue-Spirit airline merger, saying that the combination would harm consumers and violate antitrust law. The suit puts in jeopardy a transaction that JetBlue has characterized as consumer-friendly because it would create a stronger competitor to the “Big Four” carriers that dominate the United States market. On Tuesday, the Justice Department said removing Spirit from the travel market would “eliminate the unique competition” it provides as a low-cost carrier. This would “leave tens of millions of travelers to face higher fares and fewer options,” the department added in its complaint. A JetBlue statement released Monday in anticipation of Tuesday’s action laid out “procompetitive” aspects of the deal, including “the JetBlue Effect,” when larger airlines Delta, United, American and Southwest were forced to cut fares due to JetBlue. But the Department of Justice (DOJ) dismissed this argument in its complaint, saying that JetBlue has evolved from a “disruptor to closer ally of the Big Four.” The US complaint, joined by Massachusetts and New York states and the District of Columbia, characterized Spirit as a valuable disruptor in air travel – an industry that has heavily consolidated over the last 15 years. Spirit’s practice of “unbundling” features of flying to charge separately for carry-on bags, food and other items, has been “particularly important for cost-conscious travelers,” DOJ said. Shares of Spirit Airlines gained 1.7 percent to $16.63 in late-morning trading, while JetBlue dipped 0.2 percent to $8.39. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.