The Transportation Department said a denial was warranted in light of a White House executive order that it "coordinate competition efforts, DOJ's conclusion that the proposed merger would have anti-competitive effects, and the pendency of the federal lawsuit challenging the legality of the transaction."

The government challenged JetBlue's planned $3.8 billion acquisition of ultra-low cost carrier Spirit, saying it would "combine two especially close and fierce head-to-head competitors."

(Reporting by David Shepardson; editing by Jonathan Oatis)