With one month left before an antitrust trial will begin deciding the fate of its proposed merger with Spirit Airlines, JetBlue Airways announced a second divestiture agreement for slots in the northeast.
Under the agreement, all Spirit holdings at Boston Logan and Newark Liberty would transfer to Las Vegas-based ULCC Allegiant Air should the merger gain approval—principally consisting of two gates in each location as well as 43 takeoff and landing slots at Newark. According to data from Aviation Week Network’s CAPA, Spirit is operating 98 departing frequencies this week from Boston and 192 from Newark.
Announcing the agreement on Sept. 11, JetBlue said it would also divest up to five gates and related ground facilities at Fort Lauderdale to the Broward County Aviation Department, a move it described is intended to promote ULCC growth.
Its divestiture agreement follows one announced in June, under which JetBlue plans to transfer all of Spirit’s holdings at New York LaGuardia—six gates and 22 takeoff and landing slots—to Frontier Airlines, also pending the merger and regulatory approvals.
The antitrust trial stems from a U.S. Justice Department (DOJ) suit and is scheduled to begin Oct. 16. The DOJ has argued that a merger of Spirit and JetBlue would eliminate “about half” of all ULCC seats in the industry. Citing potential anticompetitive effects on more than 150 routes, DOJ in its suit names several cities in the Northeast (Boston, Hartford, New York City) and in Florida (Fort Myers, Miami/Fort Lauderdale, Orlando, Tampa), as examples of where the two airlines compete “particularly closely.”
JetBlue has maintained that the merger is pro-consumer. “Our divestiture commitment, while not needed to ensure the continued growth of the vibrant ultra-low-cost carrier segment, is aimed at removing any doubt of our commitment to promoting competition,” JetBlue CEO Robin Hayes said in announcing the agreement with Allegiant.
Allegiant Chief Revenue Officer Drew Wells added, “We are committed to long-term growth, especially in areas such as New York, Boston and Florida. This agreement will allow us to expand our service in these cities and ensure that customers have even more access to affordable, nonstop flights for their travel needs.”
The DOJ earlier in 2023 won an antitrust suit against JetBlue and American Airlines, when a federal ruling in May ordered the cessation of their Northeast Alliance. Among its arguments challenging the partnership, DOJ said the NEA would “eliminate important competition” in Boston and New York. JetBlue chose to not contest the NEA ruling, stating that the termination of the partnership would render another DOJ concern in the Spirit case “entirely moot.”
JetBlue says it expects to close the transaction with Spirit in the first half of 2024.
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