Consumer Advocates Want the DOJ To Move Against JetBlue-Spirit Merger

The Justice Department will decide soon whether to block the JetBlue-Spirit Airlines merger. Consumer advocates say it would reduce competition in the air travel market, leading to fewer choices for travelers and higher fares. The airlines argue the merger will be good for competition, and bring lower fares.—npr.org

Answer the following questions to check your understanding of the story.

Why might the merger lead to higher fares on JetBlue-Spirit Airlines flights?

The merger might lead to higher fares on JetBlue-Spirit Airlines if _____________.

a) demand for JetBlue-Spirit flights decrease and demand for Delta and United flights increase

b) the merger raises the total fixed costs of the new merged airline

c) the new merged airline decreases its workforce

d) reduced competition means that the merged airline operates more like a monopoly

Why would the Justice Department block the merger between JetBlue and Spirit?

The Justice Department would block the merger if _____________.

a) the merger substantially lessens competition

b) the merged airline plans to raise air fares

c) the merged airline plans to cut its workforce

d) the merged airline substantially decreases the HHI of the airline industry

Consumer Advocates Want the DOJ To Move Against JetBlue-Spirit Merger

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