Grounded: How Overzealous Antitrust Efforts Took Down America’s Most Affordable Airline
It’s about to be prime vacation season, yet many families can’t even drive to the beach as gas prices continue to creep. And now, flying too is likely to cost even more.
Spirit Airlines, the country’s most affordable airline, just shut down.
Like so many businesses right now, Spirit couldn't survive the spiking fuel costs stemming from the war in Iran. However, the situation was not helped by prior ill-advised antitrust legislation.
The TLDR: In January 2024, the Department of Justice blocked JetBlue's $3.8 billion acquisition of Spirit, arguing that the deal would reduce competition and harmbudget-conscious travelers by eliminating competition. Within months, Spirit filed for bankruptcy. By August 2025, it filed again. This month, the airline ultimately folded—the first major U.S. airline shutdown in 25 years.
The fallout of this is significant. The shutdown leaves 17,000 full- and part-time Spirit employees out of a job, and tens of thousands of customers without flights.
For many of these customers, rebooking isn’t a viable option. Spirit’s low-cost model (cheap base fares, fees for everything else) was specifically developed to put air travel within reach of Americans who couldn't otherwise afford it. For many, the price gap between a Spirit ticket and a legacy carrier is the difference between a trip happening and it not happening at all.
In trying to drive down prices for customers, regulators may have inadvertently contributed to one of the only affordable options no longer being an option. The state of the national economy, geopolitical pressures, and skyrocketing fuel prices certainly have a big role to play here, but the Spirit story should make us look carefully at a concerning shift in antitrust enforcement that’s playing out at the state level too.
In California, the COMPETE Act would significantly expand the state's antitrust statute — opening the floodgates to waves of private lawsuits against small and mid-sized businesses simply trying to grow or change ownership who don’t have the capital or resources to fend them off.
In New York, the Twenty-First Century Antitrust Act would set a far lower and poorly defined liability bar, similarly unleashing class action litigation on Main Street businesses across the state.
The Bigger Picture
These proposals are well-intentioned, but sadly miss the mark. Competition is supposed to benefit consumers and small businesses – however, overly aggressive antitrust enforcement often does the opposite, hitting hardest the businesses least equipped to absorb the fallout and the employees who depend on them. This has ripple effects that would extend across the economy – impacting workers, wages, and costs.
It drives up prices. Vague liability standards create uncertainty for businesses, and when businesses can't plan around clear rules, they reconsider their investments in certain states or even increase costs to consumers.
It kills innovation. Overly broad, ideological antitrust enforcement discourages investment and growth, hitting smaller businesses hardest as they lack the capacity to absorb the added risk.
It accelerates the very consolidation it tries to prevent. When smaller players can't merge or scale, they’re more likely to disappear altogether.
The numbers don’t lie. An economic analysis of New York’s Twenty-First Century Antitrust Act bill suggests it would result in a 1% GDP loss — $20 billion — as well as the loss of 58,000 jobs in the first year alone. And a similar study of California’s COMPETE Act found the legislation could reduce California’s gross domestic product by $1 trillion and eliminate 1.6 million jobs over 10 years.
This demonstrates the paradox of overreach: heavy-handed antitrust enforcement, designed to bring prices down, ends up damaging the pro-affordability cause through job losses, chilled investment, and market uncertainty.
The Bottom Line
Americans are already dealing with an affordability crisis that’s only getting worse. Lawmakers across the country should be focused on bringing forward policies that make it easier for businesses to grow, compete, and thrive, not harder.
Antitrust enforcement should focus on real, evidence-based consumer harm, not be treated as a blunt ideological instrument that diminishes competition and drives business away. Meanwhile, policymakers should focus on policies that actually bring prices down – recent moves to clear burdensome regulations hindering business owners in New York or cut red tape on critical building projects in California are great examples.
Policymakers don't have to choose between protecting consumers and letting markets work, but they do need to make sure that policies intended to lower costs for us all aren’t having the opposite effect.