June 18, 2024

Political Commentary

News Politics Business Sports

JetBlue forecasts ongoing losses, Spirit antitrust trial begins

2 min read

The JetBlue drop-off area at New York’s LaGuardia Airport on Oct. 31, 2023.

Leslie Josephs/CNBC

JetBlue Airways stock tumbled to a nearly 12-year low Tuesday as the company forecast a loss for the fourth quarter and heads to court to defend its acquisition of budget carrier Spirit Airlines, a purchase it argues is crucial to its future.

Shares fell more than 18% in early trading Tuesday to $3.42 apiece before recovering some of those losses. Spirit shares fell more than 17% at their lowest point to a three-year low.

The U.S. Department of Justice sued in March to block JetBlue’s $3.8 billion all-cash purchase of Spirit, a deal the airline reached with the discounter in 2022 after a bidding war with rival Frontier Airlines.

The deal would create the fifth-largest airline in the U.S. JetBlue argued it needs to buy Spirit to grow and better compete with giant carriers — American, Delta, United and Southwest — which control about three-quarters of the U.S. market and are products of megamergers themselves.

The Justice Department, however, alleges that “the proposed transaction will increase fares and reduce choice on routes across the country, raising costs for the flying public and harming cost-conscious fliers most acutely.”

JetBlue plans to remove seats from Spirit’s bright-yellow planes and outfit them with seatback screens to match JetBlue’s interiors. Spirit’s business model is based on packed planes, no-frills fares and fees for everything from seat assignments to carry-on luggage, while JetBlue has more amenities and fewer seats on board.

A JetBlue Airlines plane takes off near Spirit Airlines planes at the Fort Lauderdale-Hollywood International Airport on May 16, 2022 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

The lawsuit is a test for President Joe Biden’s Justice Department, which has aggressively pursued antitrust cases with mixed results in the airline, health-care and publishing industries, among others.

The trial starts Tuesday and is set to…

2023-10-31 11:36:09

All news and articles are copyrighted to the respective authors and/or News Broadcasters. VIXC.Com is an independent Online News Aggregator

Read more from original source here…

Leave a Reply

Copyright © All rights reserved. | Newsphere by AF themes.