JetBlue and Spirit Defy Judge Young’s Nonsensical Ruling

By Robert Bork Jr.

January 22, 2024

Kudos to JetBlue and Spirit for their brave decision to appeal federal Judge William Young’s decision to block their $3.8 billion merger.

In his ruling, Young acknowledged that the four large U.S. carriers – American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines – would feel some competitive effects from the combination of JetBlue and Spirit Airlines. But he based his decision on the fact that Spirit had a history of inducing competitors to reduce fares to compete with its low-cost approach.

Judge Young then wrote: “Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you.”

In fact, nothing in his ruling is for them. Spirit has been bleeding cash and laying off employees left and right. Helane Becker, airline industry analyst, said that the likeliest scenario for Spirit “is a Chapter 11 filing, followed by a liquidation.” She said that there are “limited scenarios that enable Spirit to restructure.”

In other words, this would not be one of those bankruptcies in which an airline offloads debt, revises contracts and returns to the market in fighting trim. It would be death and dismemberment, with the Big Four airlines snapping up new equipment and new routes at bargain prices. If concentration and a lack of competition are your concern, Judge Young’s ruling was like a pilot landing at the wrong airport.

Let’s hope the U.S. Court of Appeals for the 1st Circuit has a better understanding of economics. In the meantime, Judge Young, this appeal is for you.