JetBlue Airways saw its stock take a nosedive to a near 12-year low on Tuesday, coinciding with the start of its antitrust trial to defend its acquisition of budget carrier Spirit Airlines. The airline’s shares fell by 15% to approximately $3.55 each during early trading, while shares of Spirit Airlines also dropped by about 10%. This legal battle is crucial for JetBlue as it argues that purchasing Spirit Airlines is essential for its future growth and ability to compete with the U.S. airline market’s giants.

JetBlue has been caught in the crosshairs of the U.S. Department of Justice, which filed a lawsuit in March to block the airline’s $3.8 billion all-cash purchase of Spirit Airlines. The DOJ claims the proposed transaction will lead to higher fares and fewer passenger choices, ultimately harming cost-conscious fliers. JetBlue contends that this acquisition is necessary to grow and effectively compete with major airlines such as American, Delta, United, and Southwest, which currently control about 75% of the U.S. market.

Neither JetBlue nor Spirit are on solid ground, with both airlines grappling with rising fuel prices, decreased travel demand post-pandemic, and falling fares. In its third-quarter results, JetBlue reported an adjusted loss per share of 39 cents on revenue of $2.35 billion, failing to meet analysts’ expectations. Spirit Airlines has also hit turbulence, announcing that it expects little to no capacity growth next year due to decreased demand and an engine issue with Pratt & Whitney. These challenges make the outcome of the antitrust trial all the more critical for the future of JetBlue and its potential acquisition of Spirit Airlines.

The stakes are high for JetBlue as it navigates a turbulent market and a contentious legal battle. The outcome of the antitrust trial will be a decisive factor in determining the airline’s ability to grow and compete in an industry dominated by a few significant players. It will also serve as a test for President Joe Biden’s Justice Department, which has actively pursued antitrust cases in various industries, including airlines, healthcare, and publishing.