The court cases challenging JetBlue’s takeover of Spirit Airlines have taken a possible sharp twist with the revelation of JetBlue documents that were given to the court but not meant to be made public.
The merger is being challenged as anti-competitive by both the Department of Justice and a coalition of individual travelers and travel agents who argue that eliminating a leading low-cost carrier would result in raised fares and reduced competition. JetBlue, on the other hand, says the merger would strengthen competition in the low-price market by giving it a better position in an industry where the top four airlines control over 80% of the market.
The documents, according to plaintiffs in the private suit, show that “JetBlue plans to increase fares on aircraft it acquires from Spirit by at least 24%” as a conservative estimate; it added that “fare increases may be as high as 40%.” They also say that JetBlue “acknowledges that Spirit’s exit from a route results in market-wide price increases of all other airlines serving that route by 30%.”
JetBlue, on the other hand, says that while the document contain those numbers the opposing side has relied on “information which, taken out of context, creates a completely inaccurate picture of the facts. We are confident that our merger with Spirit will give a much-needed boost to airline competition in the U.S. and result in more low fares and higher-quality service for customers.”
A hearing on the case is set for October 16 in Boston Federal Court. JetBlue has asked the judge for a summary judgement dismissing the suits and allowing the merger, but that prospect now seems less likely. Earlier this year, a court ordered the breakup of the Northeast Alliance of JetBlue and American; JetBlue chose not to contest that order and instead concentrate on its planned merger.
