Spirit Airlines shares surged 20% after announcing an appeal against a federal judge's ruling blocking its merger with JetBlue, which was intended to create the fifth-largest airline in the US. The judge cited reduced competition as the reason for the block. Despite the initial stock drop, Spirit's shares rebounded following the appeal and an improved financial forecast for the fourth quarter of 2023. JetBlue shares also rose slightly after the merger was blocked.
Spirit Airlines is facing financial uncertainty after a federal judge blocked its sale to JetBlue Airways, with some investors and analysts suggesting that the airline may need to seek bankruptcy protection if it cannot find another buyer. The budget airline has been struggling financially since the early days of the pandemic and has seen its stock price plummet following the ruling, raising concerns about its ability to recover without a new deal.
JetBlue has announced that it will not appeal a recent antitrust ruling against its partnership with American Airlines, signaling the end of their alliance. However, American Airlines plans to file an appeal separately. The specifics of the injunction are yet to be determined, but both airlines are still operating flights and honoring benefits for passengers. The alliance was criticized for stifling competition, but JetBlue argues that it allows for stronger competition against Delta and United in the Northeast market. The outcome of the appeal and the impact on passengers remain uncertain.
American Airlines and JetBlue are set to appeal the antitrust ruling that broke up their partnership in the Northeast. The Biden administration sued to break up the partnership, which had already begun, citing fare increases in individual markets. American Airlines CEO Robert Isom said they're going to appeal the decision, which means figuring out how to deal with the continued partnership in the interim. The ruling has implications for the rule of law and competition in the New York market.
