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A U.S. District Court judge blocked JetBlue’s proposed $3.8 billion acquisition of Spirit on antitrust grounds.
Spirit could be forced to restructure, drop its fares or even liquidate, industry-watchers said.
Spirit, whose last profitable year was 2019, had challenges even before the ruling including grounded planes, softening demand and rising costs.

A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022.
Joe Cavaretta | Sun Sentinel | Getty Images

Spirit Airlines is on shaky footing after JetBlue Airways’ proposed $3.8 billion takeover of the budget carrier was blocked by a federal judge this week.
Industry-watchers say the carrier could be forced to cut its already low fares even more. Some Wall Street analysts argue the discount carrier could have to restructure, if not liquidate.

Spirit’s shares fell 47% after the decision was issued Tuesday. They were down another 22% on Wednesday, notching a new record low of $5.74 a share, before recovering slightly.
Spirit, whose last profitable year was 2019, had challenges even before the ruling: It’s navigating groundings of some Airbus narrow-body jets for Pratt & Whitney engine issues, and it’s facing softer-than-expected demand in the wake of the pandemic, along with higher costs.
The carrier could look for another buyer, “but a more likely scenario is a Chapter 11 filing, followed by a liquidation,” said Helane Becker, an airline analyst at TD Cowen, in a note. “We recognize this sounds alarmist and harsh, but the reality is we believe there are limited scenarios that enable Spirit to restructure.”
A potential bankruptcy could force the airline, known for its low fares and fees for everything else like seat selection and cabin baggage, to slash fares even more.
“We may see some shocking prices on major Spirit routes as the carrier tries to bring as much cash in the door as possible,” Becker wrote.

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Spirit Airlines and JetBlue Airways stock after a judge blocked their proposed merger.

Spirit and other carriers have been grappling with higher employee salaries and other costs, while a surge in domestic flight capacity has forced them to cut fares, particularly in the off-peak periods. That dynamic might be good in the short term for consumers, but not for airlines that require large amounts of cash to operate.
“Softening demand and rising costs is squeezing from both sides,” said Samuel Engel, a lecturer at Boston University’s Questrom School of Business and senior vice president at consulting firm ICF. “It’s going to start taking a bite out of fares.”

Grasping for growth

In his ruling blocking JetBlue’s acquisition of Spirit, Judge William Young, an appointee of former President Ronald Reagan, said the combination would eliminate the discounter airline famous for its rock-bottom fares and bright-yellow planes, harming the most price-conscious consumers.
JetBlue planned to take seats out of Spirit planes and rebrand them as its own, which have more creature comforts and legroom.
JetBlue, facing a quarter-life crisis as it approaches its 25th year of flying, argued it needed Spirit’s fleet, pilots and routes to grow and better compete with larger rivals American, Delta, United and Southwest.
Those four airlines combined control about 80% of the U.S. domestic market and are themselves the result of years of mega-mergers that former regulators approved.
“I don’t see how it benefits consumer to entrench the oligopoly of the big four” airlines, said Engel. “Organic [airline] growth in this country is painstaking and slow. If you bar mergers between the second-tier airlines you entrench the big four.”
Engel noted that JetBlue itself has had a big impact on larger airlines, forcing them to revamp their premium cabins after it launched its lower-priced Mint cabin about a decade ago, and offering seat-back entertainment before that.
JetBlue and Spirit said in a joint statement Tuesday that they disagree with the judge’s ruling and are evaluating their options.
“We continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers,” the carriers said after the ruling.
JetBlue and Spirit didn’t respond to a request for comment on Wednesday about their future plans.
JetBlue’s incoming CEO Joanna Geraghty will be tasked with ensuring JetBlue returns to profitability and to chart a growth path for the New York airline. The carrier operates in the country’s most congested air space and airports, which makes adding flights a challenge.
The airline swooped in with a hostile takeover bid for Spirit in April 2022, weeks after Spirit announced a merger agreement with fellow budget carrier Frontier Airlines. Spirit shareholders ultimately rejected the Frontier cash-and-stock deal and went for JetBlue’s, increasingly sweetened, all-cash $3.8 billion offer instead.
Engel said a combination of Frontier and Spirit might have been easier to get approved.
“If JetBlue didn’t insert itself in this process, a Frontier-Spirit merger might have already happened,” he said. More

Holiday sales rose 3.8% year over year to $964.4 billion, according to U.S. Census Bureau data compiled by the National Retail Federation.
It reflects a reversion to more typical pre-pandemic levels. Prior to the Covid-19 pandemic, average sales growth during the holiday season was 3.6%, according to the NRF.
It shows the resilience of consumers after they endured higher prices of food and other goods for a prolonged period.

A person picks out clothing in a Lacoste store as retailers compete to attract shoppers and try to maintain margins on Black Friday, one of the busiest shopping days of the year, at Woodbury Common Premium Outlets in Central Valley, New York, on Nov. 24, 2023.
Vincent Alban | Reuters

Holiday sales rose 3.8% year over year to $964.4 billion, according to the National Retail Federation, as consumers spent on gifts and celebrations even after enduring a prolonged period of higher prices.
The tallied results, released by the NRF on Wednesday and based on retail sales data from the Commerce Department, were roughly in line with the major trade group’s expectations. The holiday sales total was not adjusted for inflation and included both in-store and online purchases.

Ahead of the holiday season, NRF had predicted that sales in November and December would rise 3% to 4% year over year to between $957.3 billion and $966.6 billion in spending. The forecast and holiday total exclude sales at automobile dealers, gas stations and restaurants.
The results echo findings of the CNBC/NRF Retail Monitor, which showed that holiday shoppers closed out the year on a positive note. In the two key months of the season, November and December, the Retail Monitor rose 3.7% and core retail gained 3.3% year over year, excluding autos and gas.
NRF’s chief economist Jack Kleinhenz said easing inflation and a strong labor market helped prop up holiday shopping.
“Consumer spending was remarkably resilient throughout 2023 and finished the year with a solid pace for the holiday season,” he said in a news release.
Nearly every retail category saw year-over-year gains. Electronics and appliance stores and health and personal care stores led the way with sales gains of 9.3% and 9%, respectively. Online sales and other nonstore sales rose 8.2% year over year.

On the other hand, sales at sporting goods stores were roughly flat, and sales at building materials and garden supply stores fell 3.9%. Sales at furniture and home furnishing stores declined 6.2%.
Despite the solid peak season, economists and retailers are weighing whether consumers’ resilience will continue in 2024. The new year brings dynamics that could drive or dampen spending, such as a divisive presidential election cycle, cooling inflation and the Federal Reserve’s decision about whether and when to cut interest rates. Retailers are also navigating supply chain disruptions in the Red Sea that have raised the risk of higher energy and shipping costs.
Retailers will kick off the earnings season in February, but Abercrombie & Fitch, Lululemon, American Eagle Outfitters and some others have already hiked their outlooks based on better-than-expected holiday sales.
Trends during the key season reflected a reversion to more typical pre-pandemic levels. Average sales growth during the holiday season was 3.6% from 2010 to 2019, according to NRF data. Those year-over-year gains shot up during the Covid-19 pandemic, as sales surged 9.3% in 2020 and 13.5% in 2021.Don’t miss these stories from CNBC PRO: More

Homebuilder sentiment improved in January, jumping 7 points to 44 on the National Association of Home Builders monthly index.
Sentiment is now at the highest level since September.
The increase coincides with a big drop in mortgage interest rates.

A home is constructed at a housing development on June 21, 2023 in Lemont, Illinois.
Scott Olson | Getty Images

Homebuilder sentiment improved in January, jumping 7 points to 44 on the National Association of Home Builders monthly index. Anything below 50 is still considered negative, but the index has now moved 10 points higher in the last two months.
Sentiment is now at the highest level since September.

The increase coincides with a big drop in mortgage interest rates from around 8% in mid-October to the 6% range in December. Builders point squarely to that, and the effect on affordability, for growing confidence.
“Lower interest rates improved housing affordability conditions this past month, bringing some buyers back into the market after being sidelined in the fall by higher borrowing costs,” said Alicia Huey, NAHB chairman and a custom home builder and developer from Birmingham, Alabama. “Single-family starts are expected to grow in 2024, adding much needed inventory to the market. However, builders will face growing challenges with building material cost and availability, as well as lot supply.”
Of the index’s three components, current sales conditions increased 7 points to 48, sales expectations in the next six months jumped 12 points to 57 and buyer traffic rose 5 points to 29.
Regionally, on a three-month moving average, builder confidence increased the most in the Northeast, the only area now in positive territory at 55. Sentiment was flat in the Midwest and rose slightly in the South and West. More

A federal judge blocked JetBlue Airways’ purchase of budget rival Spirit Airlines after the Justice Department sued to stop the merger.
The DOJ had argued in its lawsuit the deal was anti-competitive and would hurt consumers.
JetBlue and Spirit said in a joint statement that they disagreed with the ruling and were evaluating next steps.

LaGuardia International Airport Terminal A for JetBlue and Spirit Airlines in New York.
Leslie Josephs | CNBC

A federal judge Tuesday blocked JetBlue Airways’ purchase of Spirit Airlines after the Justice Department sued to stop the merger, saying the deal would drive up fares for price-sensitive consumers by taking the discount carrier out of the market.
JetBlue’s proposed $3.8 billion purchase of discounter Spirit would have produced the country’s fifth-largest airline, a deal the carriers had said would help them better grow and compete against larger rivals like Delta and United.

“JetBlue plans to convert Spirit’s planes to the JetBlue layout and charge JetBlue’s higher average fares to its customers,” U.S. District Court Judge William Young wrote in his decision. “The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares.”
The decision, handed down Tuesday, marks a victory for a Justice Department that has aggressively sought to block deals it views as anti-competitive.
“Today’s ruling is a victory for tens of millions of travelers who would have faced higher fares and fewer choices had the proposed merger between JetBlue and Spirit been allowed to move forward,” Attorney General Merrick Garland said in a statement. “The Justice Department will continue to vigorously enforce the nation’s antitrust laws to protect American consumers.”
The DOJ alleged in its lawsuit, filed in March, that JetBlue’s acquisition of the budget airline would force many passengers to pay higher fares by eliminating Spirit and “about half of all ultra-low-cost airline seats in the industry.”
Spirit has grown rapidly in recent years by offering cheap fares and fees for everything else from seat assignments to carry-on luggage, a no-frills model that has become a favorite punchline for late-night comedians.

“Spirit is a small airline. But there are those who love it,” Young, who was appointed by former President Ronald Reagan, wrote in his ruling. “To those dedicated customers of Spirit, this one’s for you.”
Spirit shares plunged after the ruling and ended the day down 47%, while JetBlue’s stock gained about 5%.
Spirit’s market capitalization as of Friday’s close was $1.66 billion, less than half of JetBlue’s proposed purchase price. The Miramar, Florida-based airline has been struggling with grounded airplanes due to an engine manufacturing issue and softer-than-expected travel demand.

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Spirit Airlines and JetBlue Airways stock after a federal judge blocked the carrier’s proposed merger.

JetBlue and Spirit said in a joint statement that they disagreed with the ruling and were evaluating next steps.
“We continue to believe that our combination is the best opportunity to increase much needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers,” the carriers said.
A different U.S. District Court judge in Massachusetts sided with the Justice Department last year to block JetBlue’s regional alliance with American Airlines in the Northeast, a partnership that allowed the carriers to coordinate routes and schedules.
JetBlue and Spirit said Tuesday that “JetBlue’s termination of the Northeast Alliance and commitment to significant divestitures have removed any reasonable anti-competitive concerns that the Department of Justice raised.”

Hard-won deal

JetBlue fought hard for Spirit. It launched a hostile takeover bid weeks after Frontier Airlines and Spirit agreed to merge in a cash-and-stock deal. Frontier’s business model is more similar to Spirit’s, and both airlines have similar fleet configurations, unlike JetBlue’s more full-service model which stands in contrast to Spirit’s discount strategy.
After Spirit’s board rejected JetBlue’s initial takeover offer, Spirit CEO Ted Christie said in May 2022 that he didn’t think a JetBlue deal would be approved by regulators, citing the American Airlines partnership and JetBlue’s plan to take seats out of the market.
“It will not happen in our opinion and for that reason our board has rejected it and to imply otherwise again, we think is insulting,” he said on CNBC’s “Squawk Box” at the time.
Spirit shareholders ended up rejecting the Frontier deal and months later approving a sweetened JetBlue proposal in October 2022.

New CEO

Young’s decision leaves New York-based JetBlue grappling with next steps, tasking incoming CEO Joanna Geraghty with steering the airline on a new path. Geraghty was announced as successor to CEO Robin Hayes after he said earlier this month that he would retire.
JetBlue argued access to Spirit’s similar fleet of Airbus planes would allow it to grow quickly when planes and pilots are in short supply, growth it said it needs to compete against bigger airlines. The carrier operates in highly congested airspace in New York and other cities, and had planned to use Spirit as a way to gain access to more routes and travelers.
Years of previous consolidation left United, Delta, American and Southwest in control of about three-quarters of the domestic market.
JetBlue planned to remodel Spirit’s yellow planes by removing the branding and seats from the tightly packed jets to provide more of a full-service model.
“Although Spirit’s yellow aircraft livery would not immediately be repainted as JetBlue planes, at the moment the merger is consummated, Spirit and JetBlue would no longer be competitors,” Young wrote in his decision.
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The Space Development Agency awarded contracts to L3Harris, Lockheed Martin and Sierra Space to build missile defense-related satellites.
The fixed-price contracts are worth $919 million for L3Harris, $890 million for Lockheed Martin and $740 million for Sierra Space.
SDA is having the trio of companies build 54 satellites as part of a network the U.S. military is building called the Proliferated Warfighter Space Architecture.

Lockheed Martin’s Tranche 0 Transport Layer satellites are seen in one of the company’s processing facilities.
Lockheed Martin

The Pentagon on Tuesday announced about $2.5 billion in contracts will go to L3Harris, Lockheed Martin and Sierra Space to build satellites for an expanding military system.
The U.S. Space Force’s Space Development Agency is having the trio of companies build 54 satellites as part of a network the U.S. military is building, the Proliferated Warfighter Space Architecture. These satellites will be for the “Tranche 2 Tracking Layer” of the satellite constellation, related to missile defense.

Under the awards, each company will build 18 satellites — 16 for missile warnings and tracking, and two with missile defense infrared sensors. The fixed-price contracts are worth $919 million for L3Harris, $890 million for Lockheed Martin and $740 million for Sierra Space. The satellites are expected to launch in April 2027.

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“The agile response across the space industry is critically important as we deliver to the warfighter this no-fail mission capability of missile warning, missile tracking, and missile defense,” SDA Director Derek Tournear said in a statement.
PWSA is a constellation designed to have hundreds of satellites in orbit, for greater resiliency and redundancy than previous U.S. military satellites. It is being built out in “tranches,” and each will represent a new generation of satellites with increasing capabilities. Each tranche consists of two “layers:” Transport, for mesh communications, and Tracking, for targeting locations and missile defense.

An artist illustration shows the functions of the Space Development Agency’s satellite constellation.
Space Development Agency

The Pentagon has increased its ambitions in space, seeing a need to keep up with China’s growing capabilities in a domain that has widespread ramifications for national security efforts back on Earth. The Space Force has especially seen its budget grow, with $30 billion requested for fiscal 2024, about double its budget from 2021. Much of that funding goes to defense contractors and space companies providing products and services to the military.
The SDA has previously awarded contracts to build and operate satellites for the same network to Lockheed and L3Harris, as well as Northrop Grumman, SpaceX, York Space and Rocket Lab.

Sierra Space is a privately held spinoff from Colorado-based aerospace and defense contractor Sierra Nevada Corporation. Late last year, Sierra Space added about 150 employees with security clearances from SNC, as part of a broader restructuring after shipping its first Dream Chaser spaceplane.

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Boeing on Tuesday appointed retired Admiral Kirkland Donald to serve as a special advisor while the company grapples with the fallout from an Alaska Airlines midflight accident.
The Federal Aviation Administration grounded Boeing 737 Max 9s earlier this month so the jets could undergo inspections after a door plug blew off Alaska Airlines Flight 1282 on Jan. 5.
Donald will lead a review of Boeing’s quality management system and provide a report to CEO Dave Calhoun.

Alaska Airlines N704AL is seen grounded in a hangar at Portland International Airport in Portland, Oregon, on Jan. 9, 2024.
Mathieu Lewis-rolland | Getty Images

Boeing on Tuesday appointed retired Admiral Kirkland Donald to serve as a special advisor while the company grapples with the fallout from an Alaska Airlines midflight accident on a 737 Max 9 and the subsequent grounding of that plane type.
Donald will lead a review of Boeing’s quality management system and provide a report to CEO Dave Calhoun as well as the aerospace safety committee of Boeing’s board of directors, the company said in a press release.

“I’ve asked him to provide an independent and comprehensive assessment with actionable recommendations for strengthening our oversight of quality in our own factories and throughout our extended commercial airplane production system. He and his team will have any and all support he needs from me and from across The Boeing Company,” Calhoun said in a statement.
The Federal Aviation Administration grounded Boeing 737 Max 9s earlier this month so the jets could undergo inspections after a door plug blew off Alaska Airlines Flight 1282 on Jan. 5.
The FAA said in a statement Friday that the grounding would remain in place while it reviews data from inspections of the aircraft.
Donald served in the U.S. Navy as a nuclear trained submarine officer for almost 40 years before retiring in 2013. His last assignment was as the director of the Naval Nuclear Propulsion Program.
Shares of Boeing fell about 8% Tuesday and are down almost 20% since the groundings began.Don’t miss these stories from CNBC PRO: More

Airlines canceled more than 2,000 U.S. flights Tuesday as winter weather continued to disrupt travel.
Storms in the Northeast helped drive about 6,000 delays and caused problems at major airports serving New York and Washington, D.C., according to flight tracker FlightAware.
The continued grounding of the Boeing 737 Max 9 also contributed to cancellations and delays for Alaska Airlines and United, the only U.S. airlines operating the aircraft.

More than 320 flights have been canceled because of a winter storm that brought snow and freezing temperatures to Denver International Airport in Denver, Colorado, on Jan. 15, 2024.
RJ Sangosti | Denver Post | Getty Images

Airlines canceled more than 2,000 U.S. flights Tuesday as winter weather continued to disrupt travel for millions of travelers.
Storms in the Northeast contributed to nearly 6,000 delays and snarled operations at major airports serving New York and Washington, D.C., according to flight tracker FlightAware. Flight disruption improved from Monday, when severe weather contributed to more than 10,000 delays across the U.S.

The Northeast storm dropped just more than an inch of snow in New York City’s Central Park, according to the National Weather Service, snapping a more than 700-day streak since the park had seen over an inch of snow on a single calendar day. Washington’s Ronald Reagan National Airport saw almost two inches of snow accumulation.
Major airlines said travelers flying into dozens of airports in the storms’ paths can change their flights without paying fare differences.
Airlines canceled or delayed about 70% of flights at New York’s LaGuardia Airport. At nearby Newark Liberty International Airport, a hub for United, more than 45% of flights were canceled or delayed.
Reagan Airport saw more than 60% of its flights canceled or delayed. Southwest Airlines had the most delays of any U.S. carrier, with about 1,000, and canceled another nearly 450, or 14%, of its schedule.
Airlines also canceled or delayed about 30% of flights at Denver International Airport as the area recovered from a Monday storm and wind chills that reached as low as 25 degrees below zero.

The continued grounding of the Boeing 737 Max 9 also contributed to cancellations and delays for Alaska Airlines and United, the only U.S. airlines operating the aircraft. Alaska canceled more than 15% of its flights Tuesday, while United canceled about 14%.
Both airlines waived change fees for travelers whose plans were affected by the planes’ grounding.Don’t miss these stories from CNBC PRO: More

Bring a Trailer, the popular online auction site for collectible cars, saw sales climb 2% to over $1.4 billion, a record for the company.
It sold more cars in 2023 than in 2022, even as prices fell.
Bring a Trailer’s success was a rare bright spot in the classic-car market.

1967 Porsche 910
Source: Bringatrailer.com

Bring a Trailer, the popular online auction site for collectible cars, posted record sales in 2023, even as classic-car prices hit the skids.
Bring a Trailer’s sales increased about 2% last year to over $1.4 billion from $1.35 billion in 2022, according to the company’s CEO Randy Nonnenberg. Bring a Trailer sold over 30,000 cars in 2023, up 19% from 2022.

The growth in the number of cars sold helped to offset a decline in prices. The average price of a car sold on the site fell to $54,000 in 2023 from $59,500 in 2022.
The company’s growth marked a rare bright spot in the classic-car market in 2023, as prices fell from their feverish highs of 2021 and 2022 and rising interest rates took a toll on collectors. Total auction sales of classic cars (for both online and live auctions) fell 3% last year to $4.19 billion from $4.32 billion in 2022, according to data from Classic.com. Prices for many models have fallen 10% or more, according to classic-car analysts.

592-Mile 2014 Pagani Huayra
Source: Bringatrailer.com

In an interview with CNBC, Nonnenberg said inflation, economic uncertainty, a volatile stock market and turmoil overseas have cooled demand among potential bidders. But he said sellers are still offering trophy cars, and buyers are bidding, even if their offers are lower.
“People were a little bit nervous about their portfolio, so that can slow down discretionary car buying,” he said. “We thought we might see that people would stop selling or holding cars if they’re nervous. Interestingly, we didn’t see that. We still saw people wanting to trade out into something else. It’s just changed the pricing a little bit.”
Bring a Trailer’s low-cost, user friendly platform also continued to attract car enthusiasts. Its number of registered users grew to 1.2 million in 2023, up from 880,000 in 2022, according to Nonnenberg.

The number of active bidders surged to over 520,000. Sellers on Bring a Trailer pay a flat fee of $99, while the buyer fee is 5% of the car’s sale price with a cap of $5,000 — a fraction of what traditional car-auction firms take. The site offers everything from $3,000 motorcycles to $200,00 Porsches and $1 million Ferraris.
The big draw of Bring a Trailer is the auction voyeurism. Users follow bids and sales in real time, and view photos of and comments on rare cars. The site has up to 1,000 cars being auctioned at any one time, and auctions for each car typically last a week, Nonnenberg said.
For 2024, the company is launching a new suite of services to speed up the checkout process, helping buyers with paperwork, money transfers and other requirements.
Nonnenberg said this year’s sales are shaping up to be as good as or better than those of 2023, as prices stabilize and bidders gain confidence from potential interest rate cuts later in the year.
“The spring months are really popular on Bring a Trailer because people are kind of coming out of winter, and opening up their garage and starting to care about travel and cars,” he said. “We think we will be right on track for a typical spring for us, which is exciting.”
While Bring a Trailer didn’t beat its previous record for most expensive car sold on the site — a $5.36 million La Ferrari sold in 2022 — it managed to sell two cars for over $2 million last year. It’s most expensive sale in 2023 was a 2014 Pagani Huayra that sold for $2.9 million. It also sold a rare 1967 Porsche 910 race car for $2.5 million, a 2020 “Liquid Carbon” Ford GT for $1.8 million and a 2005 Porsche Carrera GT with only 601 miles for $1.8 million.
Nonnenberg said more newer cars from the 2000s and 2010s are starting to go up for auction.
“Even cars from the 2000s are starting to become collector’s items,” he said. “As everything goes electric, those cars from 20 years ago become more special. A lot of people think BAT is for 1960s cars. It’s actually much more modern.” More