A federal judge in Boston, U.S. District Judge William Young ruled on Tuesday to block JetBlue Airlines planned $3.8 billion acquisition of the ultra low cost carrier Spirit Airlines. The decision followed the U.S. Department of Justice’s argument that the deal was anti-competitive and would harm consumers. President Joe Biden hailed the ruling as “a victory  for consumers everywhere who want lower prices and more choices,” emphasizing his commitment to boosting airline competition. The ruling impacts Spirit Airlines’ future, as the ultra low cost carrier has struggled amid rising operating costs and persistent supply chain issues. 

Spirit’s shares plummeted by about 47% after the decision, while JetBlue’s shares saw a modest 5% increase. Judge Young acknowledged that a combined JetBlue Spirit would apply “stronger competitive pressure” on larger carriers dominating the domestic airline market. However, he expressed concerns that the deal would harm consumers relying on Spirit’s unique, low price model.

JetBlue and Spirit can appeal the ruling, with both airlines stating they are evaluating “next steps as part of the legal process.” JetBlue’s CEO Robin Hayes and COO Joanna Geraghty assured employees of the company’s bright future, even if they proceed without Spirit.

U.S. Attorney General Merrick Garland deemed the ruling a victory for millions of travelers who could have faced higher fares and fewer choices.

While the Judge blocked the current deal, he left the door open for the airlines to try again with potential modifications. 

Investors and analysts had previously expressed concerns about Spirit’s troubles affecting JetBlue post merger. The Justice Department argued that allowing JetBlue to absorb Spirit would eliminate a vital source of low cost competitive disruption. JetBlue, a higher cost airline than Spirit, had sought to address regulators; concerns by agreeing to take away gates and slots at key airports.

The case reflects the Biden administration’s broader push for aggressive antitrust enforcement in the airline industry, marking a victory in their efforts to prevent further concentration.