Spirit Airlines plunges as JetBlue deal blocked by judge

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Spirit Airlines plunges as JetBlue deal blocked by judge
Credit: © Reuters.

Spirit Airlines (NYSE: SAVE ) shares plunged over 50% Tuesday after JetBlue Airways' (NASDAQ: JBLU ) acquisition of its low-cost rival was blocked by a federal judge, saying it "would substantially lessen competition."

The Justice Department previously sued to halt the deal, alleging it would drive up fares for some price-sensitive consumers.

"JetBlue plans to convert Spirit's planes to the JetBlue layout and charge JetBlue's higher average fares to its customers," said U.S. District Court Judge William Young in his decision. "The elimination of Spirit would harm cost-conscious travelers who rely on Spirit's low fares."

At the time of writing, JetBlue shares are up 4.5%.

The verdict is a victory for the Justice Department, which has been aiming to block deals it sees as anticompetitive.

Reacting to the ruling, a reported statement from JetBlue and Spirit states that they disagree with the decision and continue to believe the combination is the best opportunity to increase much-needed competition and choice.

The two companies are said to be reviewing the court's decision and evaluating their next steps.

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