Spirit Airlines CEO Defends $3.8 Billion JetBlue Merger to Challenge US Airlines

Ted Christie, the Chief Executive Officer of Spirit Airlines, appeared in court on Wednesday to defend the proposed $3.8 billion acquisition of his company by JetBlue Airways. Christie argued that this merger is essential for creating a viable competitor against the four dominant airlines that control the U.S. aviation industry.

During the second day of the trial, held in the U.S. Department of Justice’s lawsuit challenging the merger, Christie testified that despite years of growth, his ultra-low-cost airline remained “relatively insignificant.” Speaking from the witness stand in a Boston federal court, he emphasized that Spirit Airlines had recognized the need for a merger with a rival since 2016 to effectively compete with the four major airlines that hold an 80% share of the U.S. domestic market.

Read more: JetBlue & Spirit Airlines Antitrust Trial Date Set For October

“What we’re really trying to do is establish a fifth viable competitor,” Christie stated, responding to questions from Spirit’s lawyer, Jay Cohen. He highlighted that Spirit Airlines, which had not turned a profit in three years, only held around 3% of the market and faced “more effective” competition from larger airlines, such as United Airlines, American Airlines, Delta Air Lines, and Southwest Airlines, especially in the wake of the COVID-19 pandemic.

While a merger with JetBlue was not the initial proposal presented to shareholders last year (Spirit had favored a since-discarded merger with Frontier Group Holdings), Christie argued that combining with JetBlue represented a far superior path compared to continuing as a stand-alone business. This move aims to challenge the dominance of the four major players in the U.S. skies and enhance competition in the aviation industry.

Source: Reuters