Federal Judge Blocks $3.8 Billion JetBlue-Spirit Merger

A federal judge blocked a proposed $3.8 billion merger between JetBlue Airlines and Spirit Airlines. U.S. District Judge William Young said that the deal would create higher costs for passengers and reduce the number of low-cost fares available.

Young wrote that the merger "does violence to the core principle of antitrust law: to protect the United States' markets – and its market participants – from anticompetitive harm."

The merger between the two budget airlines would have made them the fifth-largest airline in the country. The airlines argued the merger would help them compete against larger airlines like Delta and United.

The news sent Spirit's stock plummeting over 51%. At one point, it was down ten points but rallied a bit and was hovering around $8.21 a share in midday trading.

JetBlue and Spirit can appeal the decision.

"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," JetBlue and Spirit said in a joint emailed statement to CNN. "We are reviewing the court's decision and are evaluating our next steps as part of the legal process."