Reply To: Traders Market Weekly: Record Highs with Netflix, PCE & Tesla Risk


What is with planes? First Boeing $BA now this:
P&D’s expect the unexpected…

At least we weren’t long Spirit Airlines
$SAVE 7.75, -7.23, -48.3% plunged after a court blocked its merger with JetBlue $JBLU 5.18, +0.29, +6.1%
U.S. Global Jets ETF $JETS down 1.8%.

A federal judge on Tuesday blocked JetBlue Airways Corp.’s proposed $3.8 billion acquisition of Spirit Airlines Inc., agreeing with the Justice Department’s assertion that the deal would eliminate a competitor important to price-conscious travelers.

The decision sent Spirit’s SAVE, -44.90% stock down 55%, while shares of JetBlue JBLU, 6.58% rose 7%.

Removing Spirit as a rival would free JetBlue to raise prices by as much as 30%, Justice officials argued. JetBlue is the country’s sixth-largest carrier, and Spirit ranks seventh.

Antitrust enforcers focused during a 17-day trial on how the deal would affect head-to-head competition between JetBlue and Spirit, the impact on routes that Spirit flies today but JetBlue doesn’t, and the markets that Spirit might enter in the future.

Consumer advocates hailed the decision.

“This is an enormous victory for travelers, workers, and local communities, and another huge win for antitrust enforcers at the DOJ,” William J. McGee, senior fellow for aviation and travel at the American Economic Liberties Project, said in a statement. “For the first time in 40-plus years, a judge has flat-out blocked an airline merger to protect us all from an even more consolidated industry.”

  • This reply was modified 1 month ago by Truman.