Biden Administration’s Merger Block May Have Doomed Spirit Airlines

Clear Facts

• Spirit Airlines faces potential liquidation after the Biden DOJ blocked its 2023 merger with JetBlue, causing stock to plummet 47%
• Heritage Foundation economist says the blocked merger killed Spirit’s only path to survival given its razor-thin 2-3% profit margins
• President Trump supports a Spirit buyout to save 14,000 jobs, saying the federal government should help while criticizing Biden-era antitrust enforcement

Spirit Airlines stands on the brink of liquidation, and a Heritage Foundation economist says the Biden administration’s opposition to its merger with JetBlue bears significant responsibility for the carrier’s collapse.

A federal judge delivered the final blow to the merger plan, but the ruling stemmed directly from a 2023 lawsuit filed by Biden’s Department of Justice and several states. That legal action arguably sealed Spirit’s fate as the airline now struggles through bankruptcy proceedings with liquidation looming.

“Today’s decision by JetBlue is yet another victory for the Justice Department’s work on behalf of American consumers,” then-Attorney General Merrick Garland stated when the merger was blocked.

“The Justice Department proved in court that a merger between JetBlue and Spirit would have caused tens of millions of travelers to face higher fares and fewer choices. We will continue to vigorously enforce the nation’s antitrust laws,” he added.

Peter St. Onge, an economist at The Heritage Foundation, told The Daily Wire that the blocked merger — combined with heavy taxation and rising jet-fuel prices linked to Middle East conflicts — created an impossible situation for the budget carrier.

“The main thing that drove them over the edge was blocking the JetBlue merger. On the day that it was denied, their stock fell 47%. And the big picture here is that the low-cost carriers can’t pass anything on, right? They have razor-thin margins, like 2 or 3%. So they need scale in order to survive,” he explained.

“The Department of Justice argued that Spirit was useful because it was keeping fares low, but of course, the reason it was keeping fares low was because of that razor-thin margin. And the only way to sustain that was to get scale. So effectively the Department of Justice killed the golden goose because it was golden,” St. Onge added.

The economist pointed to increased Biden-era regulations that created additional burdens the budget airline couldn’t absorb.

“The legacy carriers were able to pass that on. The low-cost carriers, they couldn’t pass it on,” he said.

President Donald Trump told CNBC’s “Squawk Box” on Tuesday that he wants to see the airline purchased, acknowledging Spirit’s dire situation and suggesting federal assistance may be warranted.

“I don’t mind mergers. I think I’d love somebody to buy Spirit, it’s 14,000 jobs,” he said.

Trump distinguished Spirit’s situation from rumors of a potential American Airlines-United Airlines merger, which American has denied. He expressed skepticism about allowing such a combination between two financially healthy carriers.

“But with American, it’s doing fine, and United is doing very well […] I don’t like having them merge,” Trump added.

St. Onge noted that “United and American traditionally would be an absolute no-go for antitrust” given their much larger market presence. He suggested Trump may view Spirit as a “special case” because of its emphasis on providing “low-cost fares” for Americans who otherwise couldn’t afford air travel.

Last week, the Department of Transportation told The Daily Wire that “when Joe Biden and Pete Buttigieg blocked a proposed Spirit/JetBlue merger in 2024, their DOJ bragged it was ‘a victory for U.S. travelers who deserve lower prices and better choices.'”

“If American consumers were faced with one fewer ultra low cost carriers, they would obviously disagree,” the department added, noting that DOT is “monitoring the situation.”

Spirit Airlines declined to comment on its future, telling CNBC last week that it does not “comment on market rumors and speculation.” The airline’s silence comes as 14,000 jobs hang in the balance and American travelers face the potential loss of one of the few remaining budget airline options.

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