What the potential merger of JetBlue and Spirit could mean for consumers?


As JetBlue prepares to acquire Spirit Airlines in a $3.8 billion deal, many are wondering what the future holds for both airlines and their loyal customers.

The JetBlue-Spirit deal still faces a shareholder vote and regulatory approval, which could be difficult if federal officials believe the deal would reduce competition and raise tariffs. Spirit is known for its barebones and discounted fares, while JetBlue is more of a full-service airline.

“I think it’s bad news for travelers,” Scott Keyes, founder of Scott’s Cheap Flights, said in an interview with TBEN News. “Competition between airlines is the biggest determinant of how many low-cost flights you see on a given route.”

Keyes said Spirit is an “anchor” in the airline market and its low fares are driving down ticket prices from major airlines.

ALSO READ  Man dies days after shooting in north Minneapolis

“Your Delta fares, your US fares, are actually cheaper if they’re on a route where they compete with Spirit because they have to drop those fares to try to compete and get more customers,” Keyes said.

JetBlue’s CEO Robin Hayes said the acquisition could be a “solution to the lack of competition” in the U.S. airline industry, saying in a press release: “Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to reduce fares of the Big Four airlines.”

In this December 12, 2018 file photo, a Spirit Airlines plane is parked on the tarmac of Dallas/Fort Worth International Airport in Texas.

Robert Alexander/Getty Images, FILE

While experts say the Spirit shareholder vote should pass, JetBlue is expected to face regulatory hurdles.

ALSO READ  Tennessee's embrace of conservative Michigan college sours

“[The Department of Justice] will try to model what will happen with one less airline. What will that do to route structure, load factors, capacity and fares,” Ravi Sarathy, a professor of International Business and Strategy at Northeastern University’s D’Amore-McKim School of Business, told TBEN News. “And they will also try to model whether this will improve overall air quality and the quality of flight service.”

Sarathy said the merger could help improve JetBlue’s product. With the $3.8 billion purchase, JetBlue would also bring in Spirit’s Airbus fleet and the pilots’ staff — both highly sought after as airlines deal with ongoing pilot shortages and delayed aircraft deliveries amid disruptions to air traffic. the supply chain.

ALSO READ  John Oliver brutally roasts Josh Hawley over fleeing video

“The question will be: do Spirit passengers want better service, or are they really more concerned about the lowest possible airfare?” said Sarathe. “That remains to be seen.”

JetBlue offers sunbeds on some transcontinental routes and into London, while Spirit does not have a first/business class cabin. JetBlue also offers complimentary in-flight entertainment and seat back snacks; Spirit does not have onboard televisions or free food. It’s unclear how the two airlines would mix their products if a merger is approved.

Spirit shareholders are expected to vote on the merger next month. If that vote passes, a federal government review could take months, if not years.

Sam Sweeney of TBEN News contributed to this report.