JetBlue steps up campaign to save plan to buy Spirit Airlines for $3.8 bn

JetBlue Airways said on Monday it has reached agreement to turn over Spirit Airlines’ operations at airports in Boston and Newark, New Jersey, as JetBlue ramps up its effort to win regulatory or court approval to buy Spirit.

JetBlue CEO Robin Hays said the announcement is aimed at removing any doubt of our commitment to promoting competition.

The US Justice Department is suing to block JetBlue’s proposed USD 3.8 billion purchase of Spirit, arguing that it will hurt competition and raise prices by eliminating Spirit, the nation’s biggest discount airline. A trial is scheduled to start next month in federal court in Boston. Lawyers for two dozen consumers have filed a similar lawsuit in the same court.

The Justice Department was emboldened after it won a similar case and blocked a partnership between JetBlue and American Airlines, leading JetBlue to scramble to salvage its Spirit deal.

The New York-based airline argues that buying Spirit will make it bigger and a stronger competitor to the biggest US carriers.

Under the deal announced Monday, Allegiant would acquire Spirit’s two gates at Boston’s Logan International Airport and two gates and takeoff and landing rights at Newark Liberty International Airport, which is just outside New York City.

JetBlue said it would also give up as many as five gates at Fort Lauderdale-Hollywood International Airport in Florida.

Financial terms were not disclosed, but JetBlue said the deal is contingent on its acquisition of Spirit.

JetBlue had previously announced it would divest Spirit’s holding at New York’s LaGuardia Airport to Frontier Airlines if the purchase of Spirit goes through.