Colombo (News 1st) - The U.S. government on Tuesday moved court to block the $3.8 billion acquisition of Spirit Airlines by JetBlue Airways on the grounds that consolidation of any industry by a few dominant players is unhealthy for a free economy, U.S. media reported.
Spirit Airlines had agreed to the sale last year after a long-drawn-out negotiation in which Frontier Airlines also bid for Spirit, and it was due to go ahead.
The Department of Justice filed an action in a Federal Court in Massachusetts to prevent the acquisition of Florida-based budget carrier Spirit by New York-based JetBlue, which would create the 5th largest airline in the U.S. The states of New York and Massachussetts, and the District of Columbia, also joined in the lawsuit on the side of the federal government.
"A JetBlue acquisition of Spirit will have lasting negative impacts on consumers. JetBlue's plan would eliminate the unique competition that Spirit provides, and about half of all ultra-low-cost airline seats in the industry, leaving tens of millions of travelers to face higher fares ad fewer options," the Justice Dept's plaint noted.