From CNBC:

A federal judge blocks JetBlue Airways’ proposed $3.8 billion takeover of Spirit Airlines. The decision caused Spirit’s shares to fall 47% and another 23% on Wednesday, reaching a record low of $5.74 per share. The discount carrier faces the possibility of restructuring or even liquidation.

The ruling has sparked speculation that Spirit Airlines may be forced to cut its already low fares even more. The carrier has faced challenges including the grounding of some Airbus narrow-body jets for engine issues and softer-than-expected demand following the pandemic.

A potential bankruptcy could lead to even lower fares and drastic price reductions on major Spirit routes. The judge’s decision could have significant implications for Spirit and other carriers, given the recent surge in domestic flight capacity and rising costs in the industry.

Judge William Young stated that JetBlue’s acquisition of Spirit would eliminate the budget carrier known for its low fares, harming the most price-conscious consumers. JetBlue planned to take seats out of Spirit planes and rebrand them as its own, intending to use Spirit’s fleet, pilots, and routes to better compete with larger rivals.

JetBlue and Spirit have stated that they disagree with the judge’s ruling, and JetBlue’s incoming CEO will be tasked with charting a growth path for the airline. The outcome has raised concerns about the potential impact on consumer choice and competition in the airline industry.



Read more: Failed JetBlue buyout leaves Spirit Airlines with a tough path ahead