JetBlue agrees to sell Spirit assets in Boston, Newark to Allegiant

FILE PHOTO: Illustration shows Spirit Airlines and jetBlue Airways logos

By David Shepardson

(Reuters) - JetBlue Airways Corp said Monday it had agreed to sell all of Spirit Airlines assets at Boston and Newark Liberty airports to Allegiant, as it works to win approval for its tie-up with Spirit.

JetBlue said it had agreed to transfer two gates in Boston, two gates in Newark, and 43 takeoff and landing authorizations in Newark to Allegiant.

In addition, it has agreed to relinquish up to five gates at Fort Lauderdale-Hollywood International Airport to the Broward County Aviation Department, and will work closely with the department to facilitate Allegiant's growth at that airport using these gates, JetBlue said.

The Justice Department, joined by Massachusetts and other state attorneys general, sued in March seeking to block JetBlue's $3.8 billion acquisition of Spirit, alleging the deal was "presumptively illegal" and would "lead to higher fares and fewer seats, harming millions of consumers on hundreds of routes." Trial is set to begin Oct. 16.

The deal would be the biggest in the U.S. airline industry since American Airlines and US Airways merged in 2013.

On June 1, JetBlue said it would divest all of Spirit’s holdings at New York LaGuardia to Frontier. Both the Allegiant and Frontier agreements are conditioned on the completion of the JetBlue-Spirit transaction and must get approvals from regulatory and airport authorities.

JetBlue CEO Robin Hayes said the "divestiture commitment, while not needed to ensure the continued growth of the vibrant ultra-low-cost carrier segment, is aimed at removing any doubt of our commitment to promoting competition."

JetBlue said in July it would not challenge a U.S. judge's May order that it end an alliance with American Airlines. The decision terminated the three-year-old "Northeast Alliance," which allowed the two carriers to coordinate flights and pool revenue.

JetBlue argued terminating its alliance with American renders "entirely moot" the government's objections to its deal to buy Spirit.

(Reporting by David Shepardson in Washington and Mehr Bedi in Bengaluru; Editing by Anil D'Silva and Mark Potter)