erj_pilot: What do you think?
I question the governments motives...
Somehow I find it unbelievable that they are concerned with competition in blocking this?

Airline Shares Hit Turbulence After Judge Blocks JetBlue-Spirit Merger

JetBlue Airways and Spirit Airlines have released a statement saying they disagree with US District Judge William G. Young's decision to block the merger.

This is a big win for Biden's Justice Department, which has sued to block JetBlue's proposed $3.8 billion acquisition of Spirit.

"JetBlue's plan would eliminate the unique competition that Spirit provides - and about half of all ultra-low-cost airline seats in the industry - and leave tens of millions of travelers to face higher fares and fewer options," the DoJ alleged in its lawsuit in March.

It appears they got their wish as US District Judge William G. Young ruled favor of the federal government. He argued the merger would hurt cost-conscious travelers by eliminating deep-fare discount airlines:

"If JetBlue were permitted to gobble up Spirit — at least as proposed — it would eliminate one of the airline industry's few primary competitors that provides unique innovation and price discipline," Young wrote, adding "Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier."

The ruling comes after a trial in November, where lawyers for the feds claimed that the merger would eliminate the need for larger airlines to offer budget-friendly fares. Both airlines argued that consolidation was the only way to achieve cheaper tickets.

However, the feds have claimed removing Spirit as a rival would allow JetBlue to raise prices by as much as 30%.

According to Bloomberg, "The merger agreement between the companies expires in July 2024 and JetBlue and Spirit could appeal Young's decision to the First US Circuit Court of Appeals in Boston. The final outcome could reshape the competitive landscape for low-cost carriers in the US."

"Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one's for you," the judge said.

https://www.zerohedge.com/mark...etblue-spirit-merger

The airline industry history is a continuous string of companies undercutting all the others in price. Many times they are startups burning cash at a loss. Or they are cutting corners to slash their costs (service, crammed in more seats, pay much lower wages, etc). This inevitably weakens the established carriers who have to try to compete at least somewhat with the ultra-discount carrier.

Losing an independent ultra-discount carrier isn't necessarily bad for the industry or for the vast majority of passengers.

quote:

Originally posted by chellim1:

"Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one's for you," the judge said.

Did the Judge really say that? The hell

quote:

Losing an independent ultra-discount carrier isn't necessarily bad for the industry or for the vast majority of passengers.

Right... that's kind of what I think the DOJ is thinking/doing.

They say they want to save Spirit: "To those dedicated customers of Spirit, this one's for you," while they twist the knife in Spirit's back.

Spirit won't survive independent. The stock has gone from over $15 to under 6/share.

Spirit Airlines Inc (SAVE)
5.98 -1.94 (-24.49%)

quote:

Originally posted by Balzé Halzé:

quote:

Originally posted by chellim1:

"Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one's for you," the judge said.

Did the Judge really say that? The hell

Judge forces 2 airlines into bankruptcy...
Tells low income travelers, “This Bud’s for You!”

quote:

and leave tens of millions of travelers to face higher fares and fewer options

So what else is new?

Spirit Airlines Explores Restructuring Options After Fed Judge Kills JetBlue Deal

Shares of Spirit Airlines tanked again, plunging another 24% around midday, in reaction to a Wall Street Journal article suggesting that the budget airline might explore restructuring.

https://twitter.com/zerohedge/...e-kills-jetblue-deal



People familiar with the situation said Spirit executives plan to meet with advisers about its future. The airline faces a massive wall of near-term debt maturities, upwards of $1.1 billion due September 2025. And a Fitch Ratings report on Wednesday warned the airline will have trouble refinancing the debt.

Spirit problems began on Tuesday when a federal judge in Boston blocked the $3.8 billion JetBlue deal. The judge sided with the Justice Department (Biden admin), indicating that the merger would have reduced competition and harmed travelers who rely on Spirit's low fares.

A spokesperson for Spirit told WSJ, "While we are disappointed with this outcome, we are confident in our strengths and strategy. Spirit has been taking, and will continue to take, prudent steps to ensure the strength of its balance sheet and ongoing operations."

On Tuesday evening, TD Cowen analyst Helene Becker told Yahoo Finance Live in a TV interview that the "merger" story between the airlines was over. She said, "Spirit, however, we think they've got bigger issues ... the airline is going into chapter 11 sooner rather than later if you're going to provide your own debtor-in-possession financing, which is what we think Spirit will do."

With Spirit effectively being forced into bankruptcy by the Feds, it's only a matter of time before the company's assets are bought in court for a hefty discount. So what's next for Spirit's 12,000 employees? ...and what will happen to ticket prices after?

https://www.zerohedge.com/mark...e-kills-jetblue-deal

The airline industry needs an enema. My kid lives on the west coast now so I need to fly to visit him. Fine! Several flight itineraries wanted to fly me to the east coast and then back to the west coast. How much more does it cost to fly my ass thousands of miles in the opposite direction before sending back in the right direction?
Makes no sense at all!

quote:

Originally posted by YooperSigs:
The airline industry needs an enema. My kid lives on the west coast now so I need to fly to visit him. Fine! Several flight itineraries wanted to fly me to the east coast and then back to the west coast. How much more does it cost to fly my ass thousands of miles in the opposite direction before sending back in the right direction?
Makes no sense at all!

It makes perfect sense, if you understand how airline hub and spoke network systems work.

It's total BS, and a judge has no business blocking it. The #13 and #15 airlines merging have no effect on the industry itself. However, without the merger spirit will definately go bankrupt and jetblue going bankrupt is a good possibility. (Jetblue needs Spirits new plane orders to stay competitive, and spirit can't afford to stay in business).

Nothing Left To SAVE: Spirit Plummets After JetBlue Terminates Acquisition As Bankruptcy Looms

Several weeks ago, when retail momentum chasers were hot in pursuit of the latest hot tip from Dave Portnoy...
.. we warned that not only was the doomed Jetblue transaction - which a Judge blocked on anti-trust grounds back on Jan 16 - not salvageable....

... but that a standalone Spirit - with the hilariously ironic ticker SAVE - was guaranteed to promptly file for Chapter 11 bankruptcy courtesy of record high debt fast approaching $7 billion, coupled with record cash burn.

Well, moments ago all of that fell into place when as we warned, JetBlue Airways, which had been facing pressure from Carl Icahn to return to sustainable growth, formally terminated its acquisition of Spirit Airlines more than a month after a federal judge blocked the $3.8 billion acquisition.

The carriers reached an agreement to walk away after determining that terms of the pact, including “receiving necessary legal and regulatory approvals, were unlikely to be met” by dates specified in the deal, JetBlue said Monday in a statement. Jetblue will be happy to walkaway from the catastrophic purchase by only paying Spirit the $69 million termination fee which should cover cash burn for at least a few weeks, and which resolves all outstanding matters related to the deal. Spirit confirmed the news in a separate statement.

“We concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement,” said Spirit Chief Executive Officer Ted Christie.

The highly anticipated - except by a bunch of retail momo chasers - decision ends JetBlue’s lengthy quest for Spirit and marks a sharp reversal after the companies pledged to fight for the tie-up. JetBlue had hoped to accelerate its growth with a quick infusion of Spirit’s planes and pilots at a time when both are in short supply.

The market reaction spoke volume: JetBlue shares surged 6.3% while Spirit stock plunged more than 15% after it was unhalted, and was last seen trading around $5.40. It has about $5.40 more to drop before this particular story ends...

... the same way every other Biden admin intervention ends: with thousands of people unemployed.

https://twitter.com/zerohedge/...ion-bankruptcy-looms



https://www.zerohedge.com/mark...ion-bankruptcy-looms