A federal judge has blocked JetBlue Airways’ acquisition of budget rival Spirit Airlines following a lawsuit filed by the U.S. Justice Department. The lawsuit alleged that the merger would lead to increased fares for price-sensitive consumers. The proposed $3.8 billion purchase of Spirit by JetBlue would have created the fifth-largest airline in the United States, with the intention of enhancing competitiveness against larger rivals such as Delta and United.

U.S. District Court Judge William Young’s decision to block the acquisition emphasized concerns that JetBlue planned to impose its higher average fares on Spirit’s customers and that the elimination of Spirit would negatively impact cost-conscious travelers who rely on the airline’s low fares. The Justice Department, which filed the lawsuit in March, argued that the acquisition would result in higher fares for tens of millions of passengers and eliminate about half of all ultra-low-cost airline seats in the industry.

Following the announcement of the decision, shares of Spirit Airlines plummeted by 60%, while JetBlue’s shares fluctuated between gains and losses. The ruling presents a significant challenge for JetBlue, particularly as the airline prepares for a leadership transition, with incoming CEO Joanna Geraghty set to navigate the company’s future path following the retirement of current CEO Robin Hayes.

JetBlue had contended that access to Spirit’s fleet of Airbus planes would enable the company to expand rapidly in the face of aircraft and pilot shortages, particularly in congested airspace areas like New York. The airline had aimed to leverage Spirit’s resources to access more routes and passengers, as previous industry consolidations had left a handful of major carriers in control of the majority of the domestic market.