By David Shepardson
(Reuters) -U.S. Senator Elizabeth Warren has asked JetBlue CEO Robin Hayes to answer if the low-cost airline privately forecast its planned $3.8 billion merger with Spirit Airlines (NYSE:SAVE) will dramatically hike air fares, according to a letter seen by Reuters.
Warren, a Democrat, cited reports that court documents suggested internally JetBlue had estimated fares on Spirit planes "could go up by as much as 40%," following the merger.
Warren said in the previously unreported letter that if accurate the documents "reveal that you have misled the public about the impacts of your merger – and they reveal that the merger will result in higher costs and reduced service for airline passengers."
The documents were filed by lawyers suing to block the merger on behalf of private travelers. The information Warren cited had been redacted, but remained visible on the documents.
JetBlue said the reported claims do "not reflect facts set out in JetBlue documents." The carrier said the 40% figure was plaintiffs' "spin on confidential evidence" and that "the factual evidence ... will demonstrate that JetBlue intends for the merger with Spirit to increase competition and help lower fares across the board."
Warren also asked if JetBlue documents show "Spirit’s exit from a route results in market-wide price increases of all other airlines serving that route by 30%." She also sent a copy of the letter to Spirit CEO Ted Christie.
A judge has set an Oct. 16 non-jury four-week trial in a U.S. Justice Department lawsuit seeking to halt the JetBlue acquisition. The Justice Department challenged the deal, saying it would eliminate competition, lead to higher ticket prices, reduce passenger capacity and shrink consumer choices.Hayes told Reuters in March that JetBlue will still serve Spirit customers buying very low-cost tickets and rejected the idea fares will go up.
"I fully recognize that very price-conscious customer and it's very important that the larger JetBlue continues to cater and provide a service to that customer and we absolutely will," Hayes told Reuters.