Federal judge blocks $3.8 billion JetBlue-Spirit deal, sending Spirit shares plummeting 47%

It also prompted analysts to speculate about the near-term health of Spirit, as well as about a potential domino effect among several carriers.

“We believe Spirit is likely to look for another buyer (maybe private equity?) but a more likely scenario is a Chapter 11 filing, followed by a liquidation,” Cowen analyst Helane Becker said in a note to clients on Tuesday.

It is unlikely JetBlue and Spirit will appeal the decision, a move that could potentially take four to five months, Raymond James analyst Savanthi Syth said Tuesday. But the decision could renew Frontier Airlines’ interest in buying Spirit with a lower, all-stock offer, she said.

JetBlue, meanwhile, could turn its attention to bidding for Hawaiian Airlines, which already is being pursued by Alaska Airlines, according to Syth.

Last week, JetBlue said its chief executive, Robin Hayes, who championed the purchase of Spirit, will step down in February and be replaced by the airline’s president, Joanna Geraghty. Geraghty would be the first woman to lead a major U.S. carrier.

Removing Spirit as a rival would free JetBlue to raise prices by as much as 30%, Justice Department officials argued. JetBlue is the country’s sixth-largest carrier, and Spirit ranks seventh.

Antitrust enforcers focused during a 17-day trial on how the deal would affect head-to-head competition between JetBlue and Spirit, the impact on routes that Spirit flies today but JetBlue doesn’t, and the markets that Spirit might enter in the future.

Consumer advocates hailed the decision.

“This is an enormous victory for travelers, workers and local communities, and another huge win for antitrust enforcers at the DOJ,” William J. McGee, senior fellow for aviation and travel at the American Economic Liberties Project, said in a statement. “For the first time in 40-plus years, a judge has flat-out blocked an airline merger to protect us all from an even more consolidated industry.”