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Advocacy groups urge U.S. to block Frontier, Spirit tie-up -Breaking

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© Reuters. A Frontier Airlines Airbus A320neo aircraft departs O’Hare International Airport in Chicago (IL), USA, November 30, 2018. REUTERS/Kamil Krzaczynski

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By David Shepardson

WASHINGTON, (Reuters) – A number of public advocacy organizations called for U.S. regulators on Thursday to stop a Frontier Group Holdings bid. Spirit Airlines According to a letter Reuters received, (NYSE:) Inc will create the fifth largest U.S. air carrier.

Public Citizen and Fight for the Future were joined by six other groups to send a letter to the Transportation and Justice Departments stating that mergers between ultra-low cost carriers would “destroy competition in the sole competitive market segment in the highly consolidated airlines industry”.

These groups stated that travelers (NYSE:) would pay higher prices for less and better options. Workers will lose their jobs and small firms will be squeezed from a once-competitive segment of the market.

However, the carriers didn’t immediately respond to our request.

Additionally, Senator Elizabeth Warren and Ben Ray Lujan along with Representative Alexandria Ocasio Cortez raised concerns to U.S. regulators about the $6.6billion airline deal. The lawmakers argued that “the resulting Spirit-Frontier carrier could affect consumers in multiple ways, consolidating the market power of the airlines and reducing the choices for travellers.”

The Justice Department declined to comment immediately. Transportation Department stated it would reply to lawmakers. It added, “administration is committed protecting competition and consumer safety across a broad range of industries.”

As the U.S. airlines industry struggles with travel volatility due to COVID-19, this merger is a good idea. At the same moment, fuel prices are rising and wages continue to rise.

It is anticipated that the merger will close by 2022’s second quarter. The main benefit of this deal is operational savings and synergies worth $500 million per year.

They pledged to prevent job loss and to add 10,000 jobs directly by 2026.

American Airlines (NASDAQ) Group Inc. and JetBlue Airways Corp (NASDAQ:) Corp have been sued by the DOJ for antitrust violations. The lawsuit relates to their joint venture, which was alleged to result in higher fares at busy Northeastern U.S. Airports.

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