Regulators block JetBlue/Spirit airlines merger, making it harder for small airlines to scale up and compete

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After a federal judge today blocked a proposed $3.8 billion merger between JetBlue Airways Inc. and Spirit Airlines, ostensibly out of concern about competition, CEI’s Jessica Melugin explained why it is the regulators who are impeding competition:

“Blocking a merger of smaller competitors trying to combine resources and scale up to compete with the top four airlines makes little sense. It risks making both Spirit and JetBlue less able to compete with the ‘big guys’ and ultimately leaving the airline industry less competitive, harming consumers. The estimated combined market share of around ten percent doesn’t justify intervening in a dynamic marketplace that desperately needs innovation and improvement, not heavy-handed government meddling. This is a short-sighted intervention on the part of the court and one that should be appealed by the parties wishing to merge to survive and compete.”

Jessica Melugin is Director of CEI’s Center for Technology & Innovation.