By Nate Raymond and David Shepardson

BOSTON (Reuters) - A U.S. judge on Tuesday scheduled an Oct. 16 trial in the U.S. Justice Department's lawsuit seeking to halt JetBlue Airways Corp's planned $3.8 billion acquisition of ultra-low-cost carrier Spirit Airlines Inc.

U.S. District Judge William Young in Boston scheduled the nonjury, four-week trial during the first hearing to be held in the blockbuster case, which the Justice Department filed two weeks ago.

A lawyer for JetBlue, Ryan Shores, had pushed for a trial in September, saying the airline wanted time to pursue any appeals before a July 2024 deadline to close the merger. Young, though, said October was the soonest his schedule would allow.

But Young promised to move expeditiously and rebuffed a Justice Department lawyer's suggestion to give the government until as late as January to try the case. He said he believed he had an "obligation" to try to rule by 2023's end.

"I'm perfectly prepared to handle the matter and look forward to it," Young said.

The lawsuit is the latest attempt by President Joe Biden's administration to push back against further consolidation in industries with the fewest competitors.

The Justice Department, which sued alongside the states of Massachusetts and New York as well as Washington, D.C., said the merger of JetBlue and Spirit would "combine two especially close and fierce head-to-head competitors.

It said the deal was "presumptively illegal" and that JetBlue planned to remove 10% to 15% of seats from every Spirit plane.

Shores, JetBlue's lawyer, countered during Tuesday's virtual hearing that the deal was "a pro-competitive transaction."

"It's good for consumers," he said. "It'll shake up the airline industry, and so it should be approved on an expedited basis."

The case is separate from a still-pending antitrust lawsuit the Justice Department also filed in Boston that seeks to force American Airlines and JetBlue to scrap their U.S. Northeast partnership because it would mean higher prices for consumers.

The parties are awaiting a judge's ruling in that case, and Justice Department attorney Edward Duffy said it wanted time before the Spirit case goes to trial to see how JetBlue's business strategies change once it is decided.

(Reporting by Nate Raymond in Boston and David Shepardson in Washington; editing by Jonathan Oatis)