At this moment, the American aviation world is closely following the stocks/jetblue-spirit-bid-time-to-buy-stock-15963695″>arguments that are made
Led by the Justice Department and six states, the complaint seeks to block the New York-based airline’s $3.6 billion bid to buy low-cost carrier Spirit.SAVE arguing that it would create an anti-competitive environment and leave consumers with little choice but to accept whatever prices JetBlue decides to set. Over the summer, documents also emerged showing plans to increase spirits prices in as much as 40%after the acquisition.
Related: This airline would benefit from the Spirit/JetBlue merger
With the trial beginning last week in the U.S. District Court for the District of Massachusetts and expected to continue until Dec. 5, litigants argued that the JetBlue-Spirit merger would make it the fifth largest airline. largest in the country and would create an anti-competitive environment.
JetBlue CEO responds to claim the airline eventually wants to buy Alaska
As first reported According to Points Guy, one of the slides from a presentation shown in court as testimony alleged that at one point JetBlue CEO Robin Hayes said that “spirit is the natural next step in our long-term goal” Alaska AirlinesALK.
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During the first two days of testimony, Hayes said the airline had pursued acquisitions of several smaller airlines in the 2010s as part of its efforts to increase its domestic presence. In 2016, he became famous lost a bid to buy Virgin America after Alaska Airlines swooped in with an offer of $57 per share or $2.6 billion after the former went public.
Hayes denied the slide, claiming he expressed interest in eventually taking over Alaska Airlines and testified that JetBlue never initiated such talks. He also testified that JetBlue has no plans to make further acquisitions if the merger with Spirit is allowed to go forward.
The purchase, Hayes said in court, is intended to put JetBlue on par with the big four airlines that currently control 80% of the U.S. market. This refers to Delta Air Lines.give itAmerican airlinesAALUnited AirlinesUALand southwestLUV.
JetBlue CEO Says ‘Organic Growth’ Isn’t Possible for Those Who Want to Become a Major Airline
“It’s a very difficult task to compete with them,” Hayes said in court on Nov. 6. “The top four airlines represent about 80% of ticket revenue in the United States. We have spent 20 years collecting 5%” of the market.
Additionally, he argued that buying smaller airlines is the only viable way for JetBlue to develop a national presence and grow as an airline, since any other major airline “would never, ever reach the size it has based on organic growth.”
In the lengthy court case, multiple arguments will be heard about how a possible merger between JetBlue and Spirit will affect the market. To mitigate the Justice Department’s concerns that it was creating an anticompetitive environment and tip the balance in favor of the merger, JetBlue had previously agreed to sell its assets in Boston and Newark Liberty International Airport to low-cost airline Allegiant, based in in Nevada, as well as dedicating five gates that Spirit currently uses in Fort Lauderdale for the same airline.
