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Just days ago, it was announced that JetBlue Airways would buy Spirit Airlines for $3.8 billion, just hours after it terminated its merger agreement with rival Frontier Airlines.
This appears to signal the end of a long and drawn-out battle between the two budget carriers for ultra-low-cost carrier Spirit, but the deal is not yet set in stone. It still needs to get regulatory approval from the government, which some in the industry think is unlikely to happen.
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That’s because the Justice Department has launched an antitrust lawsuit against the existing JetBlue-American Airlines Northeast Alliance for creating an anticompetitive monopoly on Northeast’s routes and potentially driving up airfares.
But assuming JetBlue’s takeover of Spirit goes ahead, it could mean some major changes for American air travelers.
JetBlue Spirit plans
Once combined, the airlines will become the fifth largest carrier behind the “Big Four” of American, Delta, United and Southwest. The two carriers, however, will continue to operate separately until the acquisition is completed.
According to CNBC, JetBlue’s main goal is to get bigger, and Spirit can provide more planes and pilots.
JetBlue is reportedly planning to revamp Spirit’s existing fleet, ditching the cramped seats and making it fit its own style. However, until the renovations are complete, passengers may find that JetBlue flights will fly on Spirit’s bright yellow aircraft.
In addition to the growth, JetBlue CEO Robin Hayes said improving reliability is a priority for the company, an area in which Spirit recently outperformed its rival.
What about cheap prices?
President Biden’s administration has vowed to avoid any acquisition deals that could harm healthy competition, so the JetBlue-Spirit merger could still fall through.
Hayes believes that merging the two carriers would better position the resulting airline to compete with the four that currently control three-quarters of the US market. He argued that making JetBlue bigger would result in reasonable fares to more destinations.
JetBlue doesn’t offer the kind of rock-bottom pricing that Spirit does, which translates to bare-bones service. While still a low-cost airline, it offers more amenities than Spirit, including better legroom, seatback media screens, live TV, free Wi-Fi and more snacks; It also offers a business class option with a lie-flat seat.
Meanwhile, Frontier Airlines, whose bid to acquire Spirit was rejected, is looking on the bright side. The carrier said it would gladly take the biggest share of the ultra-low-cost market spirit.
If JetBlue is ultimately successful in its merger with Spirit, Frontier will become the nation’s largest discount carrier, ahead of others such as Allegiant, Avello and Breeze.
“This gives us a significant amount of breathing room for growth,” Frontier CEO Barry Biffle said. “That’s why this is such a windfall for our employees and our shareholders.”
Frontier says the company will grow by 30 percent next year and has launched fare sales, offering a total of one million seats for just $19.
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