Senator Elizabeth Warren urged federal airline regulators to block JetBlue Airways Corp.’s proposed merger with Spirit Airlines Inc. by invoking a rarely used authority from the 1950s to argue that the $3.8 billion deal isn’t “consistent with the public interest.”
In a letter to Transportation Department Secretary Pete Buttigieg, Warren, a Massachusetts Democrat, said the agency could use its authority over airline certification transfers to stop the merger.
She contends that the elimination of Spirit, a low-cost carrier, would likely lead to higher airline ticket prices, particularly in places where Spirit and JetBlue overlap.
Although the Transportation Department is the primary regulator for the airline industry, it generally defers to the Justice Department to decide whether airline mergers pass muster on U.S. antitrust law.
The Justice Department must go to court to prove that competition would be harmed by a merger. The DOT, however, can just decide that the merger is not in the public interest, an authority it has had since the Federal Aviation Administration was created in 1958.
“DOT has the statutory authority to block mergers that it determines are inconsistent with the public interest at the agency level without having to go to court — a significant advantage over DOJ — and you have an enormous opportunity to protect consumers nationwide by using this authority aggressively,” Warren wrote.
Warren cited Spirit’s own analysis that a JetBlue deal raises antitrust concerns as evidence the agency should find the deal is against the public interest. The airline prepared the analysis for investors in May as shareholders considered competing bids from JetBlue and Frontier Group Holdings Inc.
The DOT declined to comment on the letter, saying in an emailed statement that the agency is looking into the issues involved in the proposed merger. The two airlines didn’t immediately respond to a request for comment.