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Earth Intelligence

17 Jan 2024 — 4 min read

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Middle East Escalations
JetBlue‘s Spirit Airlines Acquisition Gets Blocked

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Middle East Escalations:

Yesterday saw further escalation on as Houthi militants, backed by Iran, targeted international shipping. At around 1:45 PM Sanaa time, the Houthis fired an anti-ship ballistic missile from their controlled regions in Yemen into the Southern Red Sea's international shipping lanes. The missile struck the M/V Zografia, a Maltese-flagged bulk carrier. Fortunately, the ship was reported to be seaworthy despite the attack and continued its transit through the Red Sea without any injuries reported.
In a strike earlier that day, at about 4:15 AM Sanaa time, U.S. Forces conducted a strike in Yemen, targeting the Houthi militants. This operation successfully destroyed four Houthi anti-ship ballistic missiles that were ready for launch in Houthi-controlled areas. This U.S. military action represents a continued effort to counter the threats posed by the Houthis to international maritime security in the region.
The Houthis in Yemen have a unique structure that makes them resilient against U.S. military strikes. They operate with a decentralized command, meaning their group isn't controlled by a single leader or location. Instead, they have multiple smaller units that work independently. This setup makes it hard to stop all their activities with just a few attacks, as there isn't a single point of failure.
Their guerrilla warfare tactics add to their resilience. They quickly strike with surprise attacks and then move fast, making it difficult for larger military forces to catch them. Lastly, the Houthis get support from Iran, which provides them with political backing and military resources. This support helps them to keep going despite facing powerful adversaries. This combination of independent operation, hit-and-run tactics, and outside support keeps the Houthis active in the region.

JetBlue‘s Spirit Airlines Acquisition Gets Blocked:

A recent court ruling on January 16th blocked JetBlue's proposed acquisition of Spirit Airlines, a low-cost carrier. The $3.8 billion merger, which JetBlue and Spirit argued would enhance competition against the top four U.S. airlines and potentially lower fares, was disputed by U.S. District Court Judge William Young. Judge Young's decision indicated that the merger would actually reduce competition and lead to higher prices for consumers, particularly those with limited financial means.
Following this ruling, Spirit Airlines' stock experienced a significant drop, losing over half of its value before partially recovering, closing the day down 47% at $7.92. In contrast, JetBlue's stock rose by almost 5%, ending the day at $5.13. This ruling is a result of the Department of Justice's lawsuit filed last March to prevent the merger from being anti-competitive. The Department of Justice had previously argued that JetBlue's plan would substantially reduce ultra-low-cost airline seats, impacting millions of travelers with higher fares and fewer choices.

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