JetBlue argues it should be allowed to buy Spirit airlines

FILE - A JetBlue Airways Airbus A320, left, passes a Spirit Airlines Airbus A320 as it taxis on the runway, July 7, 2022, at the Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Fla. Lawyers for the Justice Department and JetBlue Airways are scheduled to make closing arguments Tuesday, Dec. 5, 2023, to wrap up a trial that will decide whether JetBlue can buy Spirit Airlines, the nations biggest low-fare carrier. (AP Photo/Wilfredo Lee, File)
FILE - A JetBlue Airways Airbus A320, left, passes a Spirit Airlines Airbus A320 as it taxis on the runway, July 7, 2022, at the Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Fla. Lawyers for the Justice Department and JetBlue Airways are scheduled to make closing arguments Tuesday, Dec. 5, 2023, to wrap up a trial that will decide whether JetBlue can buy Spirit Airlines, the nations biggest low-fare carrier. (AP Photo/Wilfredo Lee, File)

BOSTON (AP) -- A lawyer for JetBlue Airways said Tuesday that the biggest U.S. airlines are using their size to cement their dominance in a post-pandemic world, making it critical that a federal judge allow JetBlue to buy Spirit Airlines.

The lawyer, Ryan Shores, said JetBlue needs Spirit to be a "viable challenger" to the four airlines that control most of the domestic air-travel market.

"That mandate is even more urgent today," Shores said during closing arguments in a federal court trial over the U.S. Justice Department's lawsuit to block JetBlue's $3.8 billion purchase of Spirit, the nation's biggest low-fare carrier.

A Justice Department lawyer argued the deal would push fares higher by 30 percent and leave fewer options for travelers on a budget.

Edward Duffy said if JetBlue absorbs Spirit, it would cut the ultra-low-cost-carrier share of the market by half -- or 6 million fewer budget flights per year.

Duffy said JetBlue was contradicting itself by arguing that because of its smaller size it needs Spirit to grow fast enough to challenge the bigger airlines, while also claiming that even smaller low-cost rivals such as Frontier Airlines would have no trouble growing fast enough to replace Spirit's presence in the market.

"And most tellingly, they have invited the court to look past the harms caused to passengers who can't pay for JetBlue's richer experience," Duffy said.

There is no jury in the trial, which has stretched over several weeks and included testimony by the CEOs of both airlines. No ruling was expected Tuesday from U.S. District Judge William Young.

During the closing arguments, the judge peppered JetBlue and Spirit lawyers with questions. Young, who was nominated for the federal bench by President Ronald Reagan in 1984, said, "if the merger goes forward, there is going to be some disruption. That is inevitable."

The judge asked Shores how long it would take for consumers to see benefits that JetBlue promises, such as more competition with the bigger airlines.

The JetBlue lawyer suggested it could be two or three years, "after the market has arrived at its post-merger competitive equilibrium."

Before the trial started, JetBlue sought to win regulatory approval by agreeing to sell Spirit's gates and takeoff and landing slots at airports in Boston and the New York City area and give up some gates in Fort Lauderdale, Florida.

On Tuesday, the judge said he was "having trouble" with a permanent injunction that would block the merger in "a dynamic industry facing unique opportunities and challenges in this post-COVID environment."

The judge asked both sides if there were other divestitures by JetBlue and Spirit that might make the merger acceptable.

Duffy, the Justice Department lawyer, tried to close the door on more divestitures. He said the merger is so anti-competitive that nothing short of a full injunction against the deal would suffice. Shores, the JetBlue lawyer, said any remedies imposed by the court should be narrow.

The government sued to block the deal in March.

The outcome of the current trial could reshape the field of so-called ultra-low-cost airlines, which charge low fares but tack on more fees than the traditional carriers that dominate the U.S. air-travel market. If Spirit is acquired by JetBlue, Frontier would become the biggest discount carrier in the U.S., followed by Allegiant Air and new entrants Breeze and Avelo.

JetBlue is the nation's sixth-largest airline by revenue, but it would leapfrog Alaska Airlines into fifth place by buying Spirit.

On Sunday, Alaska announced an acquisition of its own -- it struck an agreement to buy Hawaiian Airlines for $1 billion. The Justice Department has not indicated whether it will challenge that deal.

Previous administrations allowed a series of mergers that consolidated the industry to the point where four carriers -- American, Delta, United and Southwest -- control about 80 percent of the domestic air-travel market.