NOW BOARDING GOVERNMENT AIRLINES

In March 2023, the Biden Justice Department and several states sued to block JetBlue’s proposed $3.8 billion acquisition of Spirit, arguing the merger would eliminate an ultra-low-cost carrier, thereby reducing competition and driving up fares. A federal judge agreed in January 2024, handing former Attorney General Merrick Garland one of his more celebrated antitrust victories. Garland called it “a victory for tens of millions of travelers who would have faced higher fares.” The Biden DOJ was crowing about protecting consumers from a merger that would have created the country’s fifth-largest airline and given JetBlue the scale to compete with the big four.

The theory was wrong, the logic was cramped, and the consequences are now playing out in real time.

The American airline industry didn’t consolidate because markets failed. It consolidated because the economics of aviation demanded it. Delta, American, and United didn’t become giants through organic growth alone; they got there through decades of mergers and acquisitions. The government’s antitrust framework, laser-focused on a handful of overlapping routes between JetBlue and Spirit, missed the forest for the trees. The question was never whether two small airlines sharing some gates would slightly reduce competition on the Boston-to-Fort Lauderdale run. The question was whether a combined JetBlue-Spirit could survive and compete in a market dominated by carriers ten times their size. The answer, as events have confirmed, is that Spirit on its own could not.

Since the merger was killed, Spirit has filed for Chapter 11 bankruptcy twice, in 2024 and then again in August 2025. Jet fuel costs have roughly doubled since the start of the war in Iran, which has made an already precarious balance sheet catastrophic. The carrier now has roughly $337 million in cash, against an estimated $360 million in additional fuel expenses for the remainder of the year. Even President Donald Trump’s Transportation Secretary, Sean Duffy, has publicly warned against the bailout, questioning whether the administration would just be using “good money after bad” to forestall the inevitable. United Airlines CEO Scott Kirby put it more bluntly, saying the Spirit business model is fundamentally flawed and will fail regardless of fuel prices.

They may both be right. But the Biden administration helped guarantee that outcome.

The White House itself made the connection explicit this week, with spokesman Kush Desai pointing directly to the Biden DOJ’s blocking of the JetBlue merger as a reason for Spirit’s current condition. That’s a fair attribution. The merger would have given Spirit’s assets and routes a viable corporate home, with a carrier willing to compete. Instead, the government protected competition so aggressively that one of the competitors is now on the verge of becoming a government-owned ward of the state, and at taxpayer expense. 

The Biden regulatory record on mergers was more mixed than its advocates liked to admit. The DOJ and FTC pursued an ambitious antitrust enforcement agenda but lost a significant number of high-profile cases. This one they won in court. It has not served consumers well.

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JPMorgan analysts recently warned that a Spirit bailout could “prove difficult to contain,” predicting JetBlue and Frontier would quickly follow Spirit’s lead in seeking federal assistance. That’s where aggressive antitrust overreach combined with reflexive government intervention leads: not to a more competitive market, but to an industry with its hand out in Washington.

The Biden administration blocked a private-sector solution. The Trump administration is now being asked to replace it with a public one. Neither outcome is what the government promised consumers when it went to court to protect them.