{"id":59490,"date":"2023-12-05T21:30:11","date_gmt":"2023-12-05T21:30:11","guid":{"rendered":"https:\/\/entertainment.runfyers.com\/index.php\/2023\/12\/05\/jetblue-spirit-trial-ends-leaving-airlines-to-await-word-on-their-fate-the-points-guy\/"},"modified":"2023-12-05T21:30:11","modified_gmt":"2023-12-05T21:30:11","slug":"jetblue-spirit-trial-ends-leaving-airlines-to-await-word-on-their-fate-the-points-guy","status":"publish","type":"post","link":"https:\/\/entertainment.runfyers.com\/index.php\/2023\/12\/05\/jetblue-spirit-trial-ends-leaving-airlines-to-await-word-on-their-fate-the-points-guy\/","title":{"rendered":"JetBlue-Spirit trial ends, leaving airlines to await word on their fate – The Points Guy"},"content":{"rendered":"


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The antitrust trial between JetBlue and Spirit finished on Tuesday, with closing arguments from the Department of Justice and lawyers for the airlines marking the end of a monthlong trial that will decide the future of the two airlines \u2014 and potentially impact the broader U.S. airline market.<\/p>\n

Closing arguments from both teams largely followed the same narratives that were laid out starting with opening arguments on Oct. 31. The DOJ has argued that the merger will hurt the most price-sensitive consumers, with Spirit’s elimination from the market on some routes causing prices to rise.<\/p>\n

Want more airline-specific news? Sign up for TPG’s free biweekly Aviation newsletter<\/a>.<\/b><\/p>\n

Lawyers for JetBlue, on the other hand, have said that by absorbing Spirit, it could double its size and compete more effectively with the four major U.S. airlines \u2014 American Airlines, Delta Air Lines, Southwest Airlines and United Airlines \u2014 that together control about 80% of the U.S. air travel market.<\/p>\n

The ultimate question at the heart of the trial boiled down to whether the risk of raising the lowest fares on some routes through Spirit’s exit would be worth the potential to lower the average airfare across the broader market by putting more pressure on the major carriers.<\/p>\n

JetBlue and Spirit have argued that if Spirit were to no longer exist, other ultra-low-cost carriers \u2014 such as Frontier, Allegiant, Avelo and Breeze, among others \u2014 would fill the void. The airlines plan to divest some of Spirit’s holdings in certain markets<\/a> (like Boston, New York and Fort Lauderdale), giving gates and slots to other ULCCs to preserve competition.<\/p>\n

Related: Spirit saw Northeast Alliance as biggest threat to JetBlue merger, testimony reveals<\/a><\/strong><\/p>\n

The DOJ, however, has argued that despite testimony from officials at some of those other ULCCs, it’s unlikely that they would seek to cover the former Spirit routes at least in the next few years, given differences in business models. For instance, Allegiant primarily flies on routes where there is no other nonstop competition, while Spirit will compete directly with legacy airlines on popular routes like New York to Miami.<\/p>\n

There were repeated references on Tuesday to a JetBlue analysis that found the airline commanded a 30% premium on fares<\/a> compared to Spirit. The DOJ has said that this is evidence JetBlue plans to raise fares; JetBlue officials have said that it was a hypothetical analysis when planning how to value Spirit for its bid, which did not reflect real-world conditions.<\/p>\n

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Throughout the closing arguments and during the rest of the trial, Judge William G. Young asked clarifying questions of attorneys for both sides. However, he cautioned that some of his queries were hypothetical and should not be taken as a suggestion of how he would rule.<\/p>\n

During the arguments on Tuesday, Young asked both sides whether they thought it would be appropriate to rule in a way that would conditionally allow the merger, contingent on the airlines meeting several requirements, such as further divestitures.<\/p>\n

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