JetBlue Airways and Spirit Airlines said Friday they are going to appeal a federal judge’s ruling that blocked the air carriers’ planned tie-up since the proposed merger would violate US antitrust law.
The appeal got here after US District Judge William Young in Boston on Tuesday sided with the Department of Justice in holding that JetBlue’s planned $3.8 billion acquisition of ultra-low-cost carrier Spirit was anti-competitive and would harm consumers.
The airlines filed a notice late on Friday that they are going to appeal his ruling to the first US Circuit Court of Appeals. In an announcement, the businesses said the appeal notice filing was “consistent with the necessities of the merger agreement.”
The Justice Department declined to comment.
The appeal continues the court fight to maintain the merger alive, a deal Spirit needs because it faces financial difficulties, including the grounding of various jets on account of a powdered-metal issue in its geared turbofan (GTF) engine.
Spirit shares rose 12% after the notice of appeal in after-hours trading on Friday but are still down greater than 50% since Tuesday’s ruling. JetBlue shares were down 2.6% late on Friday.
JetBlue sought to accumulate ultra-low-cost carrier Spirit for $3.8 billion. AP
Reuters reported earlier that Spirit was searching for to persuade JetBlue Airways to appeal the ruling blocking the tie-up between the sixth- and seventh-largest US airlines, in response to people acquainted with the discussions.
Spirit had told JetBlue that their deal contract requires them to exhaust legal options to finish the move, and that they need to appeal the judge’s ruling, the sources said.
The appeal flows out of a lawsuit by the Justice Department and the Democratic state attorneys general from six states and the District of Columbia, who argued the merger would result in fewer flights and better prices for thousands and thousands of Americans.
The DOJ and Democratic state attorneys general from six states and the District of Columbia argued the merger would result in fewer flights and better prices for thousands and thousands of Americans. AP
Following a non-jury trial, Young sided with the Justice Department, finding that the deal would harm consumers. He said it could eliminate Spirit’s low fares and its ability to place pressure on other higher-priced airlines.
It’s unclear how long an appeal could take, though often appeals of court rulings can take months or longer. JetBlue faces a deadline in July to shut the merger.
Should the deal not close by then, the 2 sides could either comply with terminate the merger or extend the closing date.
Earlier on Friday, Spirit said it was assessing options to refinance its 2025 debt maturities amid concerns over its balance sheet, and said its merger deal remained intact.
Spirit has been struggling to return to sustainable profitability amid rising operating costs and chronic supply-chain problems. That has raised concerns concerning the company’s ability to repay its debt that’s on account of mature next yr.
The airline this month accomplished a series of sale and leaseback transactions covering dozens of planes in a bid to repay about $465 million of debt on those jets.
Following Tuesday’s ruling, some analysts said the carrier might contemplate a bankruptcy filing to streamline its balance sheet and reorganize right into a financially robust airline.
Reuters reported on Thursday that Spirit was taking a look at options to refinance its debt and was not considering restructuring.
