The low-cost carriers on Monday scrapped the $3.8 billion dollar deal, seeing no path forward after a U.S. judge blocked the merger two months ago.

The judge said it would harm consumers by reducing competition.

JetBlue's decision to cancel its deal to merge with Spirit was welcomed by U.S. Attorney General Merrick Garland, who said it was "yet another victory for the Justice Department's work on behalf of American consumers."

The Biden Administration has taken a hard line against airline mergers, and argued the deal would drive up ticket prices.

JetBlue CEO Joanna Geraghty, in an internal note seen by Reuters, told employees that pushback from the DOJ, and the federal court ruling, made the probability of moving forward "extremely low."

And Spirit CEO Ted Christie in a statement said that "regulatory obstacles will not permit us to close this transaction in a timely fashion."

The deal would have created the fifth-largest U.S. carrier and helped Spirit Airlines ensure its survival. The ultra-low-cost carrier has grappled with weak demand in its key markets as it seeks to return to sustainable profitability. Some analysts have even suggested the company could face bankruptcy if it can't shore up finances.

Shares of Spirit were down more than 15% in Monday afternoon trading, while JetBlue shares rose more than 1.5%.