Spirit Airlines has shut down, and the collapse exposes the fantasy that blocking its merger with JetBlue somehow protected consumers. Even so, we can’t pin down Spirit’s demise on one federal judge either.
Spirit Airlines Shuts Down. Judge Young Owns Part Of This…So Do Shareholders
Spirit Airlines is liquidating after failing to secure a last-minute bailout, bringing an abrupt end to the ultra-low-cost carrier that helped pressure fares lower across the United States. On this day, I cannot help but to revisit the federal court decision that blocked JetBlue’s proposed acquisition of Spirit Airlines.
When U.S. District Judge William Young struck down the merger, he accepted the argument that preserving Spirit as an independent carrier was necessary to protect competition, especially for price-sensitive travelers.
Today, Spirit is shutting down anyway.
The Logic Always Looked Thin
As I wrote when the ruling came down, the decision relied on a fanciful theory that did not match commercial reality.
Spirit was not some stable low-fare institution ready to thrive indefinitely if left alone. It was already facing mounting debt, operational challenges, changing consumer preferences, and intense pricing pressure from larger airlines that had learned to copy many low-cost tactics.
The court effectively said consumers would be better served by keeping Spirit independent. Instead, consumers are now losing Spirit altogether, a painful irony.
The close of Judge William Young’s opinion read like the pronouncement of a politician, not a neutral arbiter of the law:
Spirit is a small airline.
But there are those who love it.
To those dedicated customers of Spirit, this one’s for you.
Why?
Because the Clayton Act, a 109-year-old statute requires this result –- a statute that continues to deliver for the American people.
As much as I blame Spirt’s feckless lawyers for failing to make a stronger argument that Sprit was absolutely not viable as an independent carrier, the idea that the Clayton Act prohibited this merger is simply spurious legal reasoning: there would be no “substantial lessening of competition” when the combined JetBlue + Spirit would have still enjoyed a market share that was only 8-9%. If anything, a stronger combined carrier theoretically would have provided consumers greater long-term stability and competition.
Spirit also never appealed the decision, even if that was a recognition of the political climate in the Biden years.
> Read More: Judge Young’s Spurious Logic In Blocking JetBlue-Spirit Merger
Spirit’s Demise Means Less Competition, Not More
I’ve said it before and I will say it again: the demise of Spirt is bad news for consumers any way you slice it.
Spirit was easy to mock and a frequent punching bag on this blog thanks to the crazy antics of its passengers.
But even travelers who never flew Spirit often benefited from its presence because fares on competing airlines tended to fall when Spirit entered a market. Now that pressure is gone and you can assuredly expect fares to rise.
Consumers who were supposedly “protected” by blocking the merger with JetBlue will soon face higher fares and fewer choices in many leisure markets.
Over and over we’ve seen carriers raise fares when Spirt exits markets.
I’ll keep saying this every time I write about Spirit.
But Judge Young May Have Saved JetBlue
For all its own issues, JetBlue (ironically) was saved by Judge Young’s poor legal reasoning. Had JetBlue completed the acquisition, it would have inherited Spirit’s debt load and fleet integration challenges at a time when costs remain elevated and fuel prices have recently doubled.
JetBlue has already lost billions in recent years and continues to face its own uphill battle against larger network carriers. Adding Spirit’s financial baggage in the current environment could have weakened JetBlue substantially or even killed it.
So while the ruling may have doomed Spirit, it may also have spared JetBlue from a deeply problematic transaction in which I’d be writing about both carriers shutting down. That should come as no solace to Young, though.
A Lot Of Blame To Go Around
This whole sad episode is a reminder that antitrust law cannot rely on wishful thinking. Preserving a struggling company on paper is not the same as preserving competition in practice. Courts and regulators can block mergers. They cannot magically restore broken balance sheets or force weak business models to become sustainable.
But Sprit’s shareholders and board are also to blame in a big way. No accountability for the lack of direction and wishful thinking of the last few years in light of a rapidly changing airline market in which the network carriers got smarter each year in poaching business from Spirit. A “Hail Mary” plan to try to go more premium when that undermined the very business model that was necessary for Spirit Airlines to survive in a crowded market.
Maybe Spirit Airlines just was not viable absent lucrative co-branded credit cards in a country in which labor unions for airlines are still very strong. But it strikes me that a merger with Frontier to truly create a low-cost giant might have led to a very different outcome for the combined carrier.
CONCLUSION
Judge Young blocked the JetBlue-Spirit merger in the name of protecting consumers. Now Spirit is shutting down and consumers lose a low-fare competitor anyway. Young’s decision remains deplorable, but Spirit’s own leadership and shareholders share tremendous blame for this failure as well.
Meanwhile, JetBlue may have dodged a financial disaster by avoiding Spirit’s debt and operating problems.
The merger was blocked, Spirit still died, and nobody really won except the competitors who will raise fares in the weeks to come.
The judges comments sound more activist politician with his own agenda rather than an impartial legal scholar. He thinks he “delivered for the American people.” His job is to interpret the law.
Did you read the Clayton Act? I did and his comments were actually in the exact spirit of the law.
An activist judge would have allowed the merger to continue, ignoring the Clayton Act, and removing one of the (or the) largest low cost carrier from the US market and subsequently creating an airline much larger and closer in size domestically to the three airlines that dominate the domestic market.
+1
It’s simplistic to think that by allowing the merger, everything will come up roses for Spirit (and JetBlue).
Spirit Airlines failed because it couldn’t adapt to rising fuel prices, not because someone used existing US law to limit further airline consolidation. Fuel price shocks are always hard on airlines. If you want to point fingers, point at fuel costs, not consumer protection.
This is a simplistic analysis. Fuel pries accelerated the demise, but the carrier was losing billions even when fuel was cheap.
LOL… So… Anyone that presents an alternative theory to your “analysis” is presenting a “simplistic view”? Or is it just that you believe that “more words” means higher complexity. Here’s another simplistic view. I just took a look at their financials, and while I wouldn’t consider investing, it looks to me like they could have reorg’ed successfully (they had ~827 million in cash reserves at the end of 2025 and they were holding 8.1 billion in assets). They would have had to do some significant belt tightening, but had they sold/leased-back their fleet (which is what I assume is the bulk of their 8.1 billion in assets) they could have payed off a good sized chunk of their 8.6 billion in debt, and probably resumed operations. The spot price for kerosene has doubled over the last six months. If you believe that facing both a doubling of a major contributor to operating costs, in addition to extreme fuel market volatility isn’t the cause of their shutdown, then no matter how many word you regurgitate in a blog post, you’re dismissing the real cause. It’s clear that you have a sycophantic political bias. This isn’t the last catastropic sledge hammer that’s going to fall over the next six months. Stand by… The fun is just starting…
Oh my, what a tool.
You should read me more often if you think I’m some sort of Trumper.
“Young’s decision remains deplorable“
But as you said, thanks to him, only one airline company went out of business instead of two…
Yes, that’s the irony, but he remains a deplorable judge in my book.
How is he deplorable? Because he enforced the law? Are you arguing that Jet Blue was going to swallow Spirit Airlines and allow it to continue to operate as it did before and not raise prices? You pointed to a couple cutesy comments made by the judge at his summation but skipped over the 100+ pages that outlined how and why he came to his decision based upon the current facts, and not what he (or she) thinks may or may not happen in the future (that would be activism).
IMO as a taxpayer I am grateful he didn’t allow Spirit & Jet Blue to merge b/c the Trump Administration would have definitely bailed it out as they would have seen it as too big to fail (and also they would have required it to be renamed Trump Airlines and painted everything bright gold). The market may have temporarily lost a low cost carrier but there will be another one, or one to take it’s place in no time.
Fundamentally, I think his ruling is at odds with §7 of the Clayton Act, and I’m not alone. And believe me, I was happy to see the merger fail (at the time) as a customer because I knew it would raise fare…but I don’t think the purpose, spirit (if you’ll pardon the pun), or text of the Clayton Act reasonably lead to Young’s decision. In other words, I liked the outcome, but the case should have come out the other way if accurately applying the law.
Goodbye, Spirit Airlines, and don’t let the door hit you in the ass on the way out. Good riddance.
Airlines whose business model has made consumers expect $20 tickets shouldn’t be in business at all, so Spirit’s demise is no great loss. You want to talk about fantasy and living in the real world, there’s some reality for you: companies that hand out what are effectively free tickets for flights is not a sustainable business model (the cost they charge consumers is effectively a rounding error), that is not a net good for society.
ULCC airlines that sell tickets for roughly the cost of a fancy cup of coffee do not provide anything that society needs. I say good riddance.
What’s it like to be so entitled? Spirit airlines got me and my family to our destination safely while saving us thousands over the years. Are you now willing to pay the differential for me and everyone else who could only afford to fly a discount airline like Spirit? The reality is Spirit served a great need, and without it many people will not be able to fly and those who do will now have to pay higher fares. How is that? Good for anyone except for those who are entitled?
Maybe rethink the headline? Your own analysis accurately discounts how much of an effect the judge’s decision likely had, and makes clear that the outcome could have been far worse had the merger gone through. I still agree that it was the wrong decision at the time, but pointing the pitchforks in his direction is overly simplistic and deflects from the real issues that brought the airline down. People picked Spirit not because they liked them or the brand, but because they had to, which put them in a terrible position when viable alternatives became available. Ultimately that’s on nobody but them.
Judge Young displayed the worst kind of “result-oriented” jurisprudence (something that judges on both the right and the left can be guilty of) and I cannot forgive him or allow him to say now, “See, I saved JetBlue.” No, sorry – I was always personally against the B6-NK merger, but it should have been allowed to go through and we can only Monday morning quarterback about what might have happened…JetBlue may have been near liquidation now itself or together the two could have undergone a Chapter 11 restructure and emerged a more powerful and viable competitor.
Shareholders are to blame and we must follow the money…I hardly absolve them or the poor leadership post-BB. But Young did help to bring Spirit down at this point and at this time.
The airline would have caused any airline that merged with them to fail also. No profits means it should not exist.
Matthew, respectfully, you’re conflating bad outcome with bad legal reasoning. Judge Young applied Section 7 of the Clayton Act exactly as written: it’s forward-looking and probabilistic, evaluated on conditions at the time of decision, not on what happens to a carrier’s balance sheet years later due to unrelated management failures. The maverick firm doctrine, recognizing that a disruptive low-cost carrier suppresses fares beyond its raw market share, is decades-old mainstream antitrust doctrine, not activist invention.
Your 8-9% market share argument also misreads how airline antitrust works: competition is analyzed city-pair by city-pair, and JetBlue’s own internal documents projected fare increases of 24-40% on overlapping routes. The failing firm defense failed because Spirit’s own executives testified to turnaround plans at trial, which is a litigation problem, not a judicial one. Judge Young’s rhetorical closing was stylistically inappropriate, granted, but tone doesn’t invalidate doctrine. “Spirit died anyway” is not a legal argument.
The ruling was legally sound; Spirit’s collapse is a business failure, not evidence of judicial error.
Good comment, but I do see it differently than you. Respectfully, the Clayton Act was not meant to force non-viable businesses to remain in business to artificially keep prices low. Spirit had lost money for years and had no solid turnaround plan absent a partner…and that was then, not even more recently when things got even worse. Even a 24% fare increase would have 1.) still kept fares low when adjusted for inflation and 2.) in the instance of the 10% route overlap between NK and B6 still provided competition, on virtually every route ( the exception being certain Florida-Puerto Rico routes). I don’t see how you, Judge Young, or anyone can argue the results of the merger “may be to substantially lessen competition or tend to create a monopoly in any line of commerce.” I grant you that the attorneys and B6 executives undermined their case, but it should not have been a lethal blow.
“Respectfully, the Clayton Act was not meant to force non-viable businesses to remain in business to artificially keep prices low.” And that beautiful line completely summarizes why the ‘Young just followed the law crowd’ is wrong.
The reality is that there was never a path forward. As Aaron noted this would have likely resulted in an even larger merged B6/Spirit collapsing.
I personally think it’s far more telling looking at history and the approaches of predatory competition. Yes, it’s business and business is brutal. But it is the ultimate demise of every airline disruptor out there it seems through time (Ryanair is the outlier – but who knows over the coming years). Just go back to Laker in the early 80’s. This was a classic example of one airline, BA, being predatory and taking them down. Even Virgin has had to fight for its life at times against BA and only survived because of Branson. You mentioned Independence Air in DC. I saw that first hand as a Washingtonian in that UA was ruthless in going after them and driving Washington flyers away from what was, at the time, a nice product alternative.
So how did the Big Three take down Spirit long before this Judge assured its solo demise? Labor. They were willing to give massive contracts to pilots and FA’s, not out of love or even need to, but because they knew the upside would be that it would destroy ULCC’s in the U.S. Even the darling of the industry WN had to reinvent itself to allow for these massive changes – with an outcome yet to be truly determined.
The cold hard fact is that these contracts, with senior pilots now making close to $400K annually in some cases, will quash competition and eventually lead to much higher fares. It will force more consolidation and I doubt you will ever see an alternative legitimate airline start-up in our lifetimes in the U.S. The fortresses are getting harder and harder to penetrate solely due to labor. B6 will be next if they can’t find a partner. Either way, it eliminates another disruptor and consumers pay.
Where does this lead us to a few years from now? Fares so high that few can fly. Fortresses so thick that no disruptor dares to start. And planes start flying at 40% – but with these high fares the airlines won’t care about filling planes (much like the hotel industry has discovered…higher rates/low occupancy is better than lower rates/high occupancy). Flying will become elite. A turn back to the 1940’s and 50’s.
As Monty Hall once alluded to, “Greed ignores the laws of probability.”
A terrible decision by a low IQ lawyer (which is 75% of them). The decision may have been for the best (i.e., lose Spirit not the combined entity), but WTF. I’ve made far better decisions when drunk and horny. But, I’m sure the smug b@$t@rd thinks he did it right.
Then you should be a judge. In the meantime, Young followed the law to the t, which is his job. You may not like the law, but the law doesn’t like you either.
If I were a judge, I would of course follow the law. He didn’t, despite your assertion otherwise.
You’re showing your ignorance, Chris.
I think fuel costs exploding as a lot more to do with this than any judge ruling. Fuel expenses are the #1 issue for major airlines. Furthermore, in a country that bangs the drum for “capitalism” in all things, the idea that a company which loses money, year after year, should be saved is comical. They do not provide an essential service that vanishes with the company. There are other airlines, and those airlines are also exploding in cost due to fuel expenses. This issue would never get better without harsh business model restructuring.
“You mentioned Independence Air in DC. I saw that first hand as a Washingtonian in that UA was ruthless in going after them and driving Washington flyers away from what was, at the time, a nice product alternative.”
Please. Independence Air was a complete and utter joke. In their own business plan CASM exceeded RASM by a huge margin and they had no reservation system. They comically believed UA’s passengers had one ounce of affinity towards their RJ feeder airline. Their CEO Kerry Skeen should have been thrown in jail for making $300m disappear in a year, but he did manage to get himself a $3m parting gift from an executive insurance policy. UFB.
I was speaking from a customer standpoint. They had more than RJ’s so you understand. The baby bus service to the west coast ie LA was quite nice and a great alternative to UA non-stops. As well it was driving down fares to smaller destinations like Lansing etc. They failed because UA launched insane promotions that were basically giving away premium international tickets to Washingtonians who would fly just a few segments domestically that competed against Indy. After UA successfully killed them they removed the promotions, people had trouble using all the certificates, and fares ballooned again.
I’m an antitrust lawyer. This is one of the many instances where antitrust populists (aka antitrust hipsters), with Lina Khan at the helm, took things too far. Fanciful theories of harm, no attention paid to factual competitive dynamics or economic reality, leading to bad outcomes in the name of “fairness” and “consumer protection.” Not that the current administration (or its previous incarnation) has fared any better in terms of antitrust policy & enforcement, they’re just as dangerously devoid of proper knowledge & total demagogues.
Reminds me of what a UK politician once said in a revealing moment just before the Brexit referendum: “We’ve had enough of experts.” I mean, sure, anyone with a mouth has an opinion, why pay attention to those who actually know what they’re talking about?
For the umpteenth time → The blocked B6-NK merger in 2024 was a huge missed opportunity for the U.S. airline industry!
For the umped teamth time, the law is the law and the judge followed the law.
You can scream this until you’re blue, but it is not that simple. The law did not call for the result, as I read it…and ideologically, I was against the merger so it’s not like this is a partisan thing.
Well since you are blaming everybody why not blame JetBlue as well for Spirits demise? After all weren’t Spirit and Frontier in serious negotiations about a merger until Jetblue entered the room with their outrageous offer. They offered more much more than what Spirit was worth which effectively killed any serious talks between Spirit and Frontier after Frontier decided they weren’t interested in a bidding war with JetBlue.
A merger with JetBlue would have killed competitions as JetBlue had no intention of keeping fares in the ULCC range. Whereas a merger with Frontier could have created a formidable ULCC carrier with over 500 aircraft in its fleet more than double JetBlue’s fleet size and would have been a threat to JetBlue in Florida and the Caribbean.
So if you want to blame Judge Young, Spirit management and Board of Directors for Spirits collapse then you also have to blame Jetblue because they ended Spirits best chance for survival simply because a merger between F9/NK would have threaten their survival.
Great article. Well written and accurate.
Spirit’s employees played a huge role in its downfall.
One flight was all many people needed to realize there was no future there.
Today’s collapse has nothing to do with the judge – either spirit alone would’ve collapsed today or an even bigger JetBlue would’ve collapsed today. We can pan the decision of the judge as much as we as we want but the fundamental issues that led to Spirits demise would not of been corrected by a merger and to blame the judge what happened today doesn’t really matter at this point. JetBlue has even said it was a blessing in disguise the merger never happened. These jet fuel prices are creating a global airline crisis and a lot of low cost airlines around the world are going to go out of business.
How quickly we forget about the orange twice and peach seditious traitors vile wars designed to deflect from the fact he is a pedo on the Epstein list. The precipitous rise in jet fuel is a major contributing variable. Had this needless war never occurred, I would be boarding my Spirit flight as planned tomorrow. And as for the judge, he was merely following the law which is his job. Sorry Matt, your comments are uncalled for and patently ignorant.
You are right that Trump hastened the demise of Spirit with his poorly-thought-out war in Iran.
But the high fuel prices only accelerated what would have happened anyway: the business model was broken and Spirit had lost money for years.
Don’t be partisan about this. I despise President Trump and most of what he has done in office, but blaming him for Spirit’s demise is silly (or to use your words, patently ignorant).