JetBlue-Spirit ruling doesn’t spell doom for Alaska-Hawaiian merger

President Joe Biden’s Justice Department has successfully had two airline linkups halted in court in recent months. That doesn’t necessarily spell doom for Alaska Air’s plan to buy Hawaiian Airlines.

U.S. District Court Judge William Young on Tuesday sided with the Justice Department and blocked JetBlue Airways‘ $3.8 billion attempted takeover of Spirit Airlines, saying that the elimination of the budget carrier known for rock-bottom fares would “harm cost-conscious travelers” who rely on those cheap tickets.

The decision immediately sparked questions of whether an Alaska-Hawaiian combination would suffer a similar fate in an antitrust lawsuit. Shares of Hawaiian plunged in the minutes after the ruling was handed down, though they ultimately recovered.

“We’d be lying to ourselves if we thought the probability of a successful merger had not been lowered following [Tuesday’s] ruling,” Deutsche Bank airline analyst Michael Linenberg wrote in a note Wednesday.

Yet the pitfalls that brought down the Spirit-JetBlue deal may offer clues into how Alaska and Hawaiian could pass muster with regulators, or in court. The Justice Department didn’t immediately respond to a request for comment about whether it plans to challenge Alaska and Hawaiian’s proposed deal.

“The court in the JetBlue case was plainly concerned that this merger was eliminating a low-price carrier,” said Herbert Hovenkamp, a law professor at the University of Pennsylvania’s Carey Law School and a specialist in antitrust law.

“What that says about Alaska-Hawaii, their advisors [and] lawyers are going to have to make sure that they can avoid those problems,” he said.

JetBlue and Spirit jointly said they disagreed with the decision and were considering next legal steps, which could include an appeal.