U.S. Transportation Secretary Sean Duffy on Saturday linked the shutdown of Spirit Airlines to the carrier’s failed merger with JetBlue during the Biden administration.
Speaking at a press conference at Newark Liberty International Airport in New Jersey only hours after Spirit ceased operations, Duffy said the former administration’s decision to block the linkup proved fatal for the ultra-low-cost airline.
“There was a proposed merger between JetBlue and Spirit,” he said. “And Joe Biden and Pete Buttigieg, along with the Biden DOJ, decided that they did not want that merger to take place. And at the time, the Biden DOJ bragged and said, as they canceled the option for this merger, that this was a victory for U.S. travelers who deserve lower prices and better choices.”
“Now, many at the time said this was a disaster, that this merger should have been allowed,” the secretary continued. “And this today would indicate this is not better for travelers, this is not better for pricing, this is not better for competition. Actually it is worse.”
JetBlue and Spirit announced plans to merge in 2022, but the deal was called off in 2024 following an unfavorable ruling in federal court. The Justice Department’s Antitrust Division argued that the merger could hurt competition and raise prices for consumers.
“If the markets are saying there needs to be a merger because there are health issues with one of the airlines or more than one airline, we have to take a look at it and make sure we make the right choices,” Duffy said. “And in this situation, history has judged the denial of the merger between JetBlue and Spirit through the Biden administration with the view that it was a massive mistake.”
Spirit ceased operations early Saturday morning after a proposed $500 million bailout from the White House failed to materialize. The carrier could not get its creditors to agree on the terms of the deal, which would have brought the majority of the company under the federal government’s ownership.
According to reporting from The Wall Street Journal and CNN, Duffy, along with senior White House advisors, had reservations about the bailout, while Commerce Secretary Howard Lutnick emerged as the most vocal advocate for saving Spirit.
Spirit was set to emerge from bankruptcy this spring or summer, but the recent surge in jet fuel prices destabilized the carrier and prompted internal discussions about liquidation. A clearer picture of the airline’s financial health is not available because it had not recently released an earnings statement.
Duffy on Saturday pushed back on suggestions that the war in Iran triggered Spirit’s collapse.
“Spirit was in dire straits long before the war with Iran,” he said. “Multiple times they had filed for bankruptcy. Their model wasn’t working. They couldn’t get to fiscal health. So the war was not the impetus for Spirit.”
