How JetBlue’s takeover of Spirit could change air travel

Passengers line up at the Spirit Airlines check-in counter at Orlando International Airport. Paul Hennessy | Light rocket | Getty Images This week, Spirit Airlines relented and agreed to sell itself to JetBlue Airways for $3.8 billion, hours after breaking up a merger deal with Frontier Airlines that didn’t get enough shareholder support. The new …

How JetBlue’s takeover of Spirit could change air travel

Passengers line up at the Spirit Airlines check-in counter at Orlando International Airport.

Paul Hennessy | Light rocket | Getty Images

This week, Spirit Airlines relented and agreed to sell itself to JetBlue Airways for $3.8 billion, hours after breaking up a merger deal with Frontier Airlines that didn’t get enough shareholder support.

The new agreement will mean big changes for travelers if it passes regulatory hurdles.

JetBlue has built a reputation for passenger comfort, such as relatively large legroom, seat-back screens, live TV, free Wi-Fi, and free snacks like Cheez-Its and Stellar vegan butter pretzels. It also offers business class with reclining seats.

Spirit, on the contrary, has become the highlight of its simple service. The cabins on its bright yellow planes are cramped, and passengers have to pay extra for “extras” like hand luggage and seat selection.

“This is a historic event. This is the first time anyone wanted to get Spirit Airlines,” The Late Show host Stephen Colbert joked about the deal on Thursday.

However, Spirit is expanding quickly and profitably, offering cheap tickets to popular destinations that can sometimes cost less than a trip to the movies or a few hamburgers. However, the airline’s “Large Front Seat” offers 36 inches of legroom for an extra charge of up to $250.

As the two different airlines push forward with their merger plans, here’s what passengers can expect:

What are JetBlue’s plans for Spirit?

jetblue wants to get bigger, and Spirit has planes and pilots to help him get there. The New York-based carrier plans to convert Spirit jets to JetBlue style, getting rid of packed seats and making them more spacious and equipped with extra amenities.

Together, these airlines will become the country’s fifth largest carrier behind American, Delta, United and Southwest. Both have a strong presence in Florida, and in recent years each has expanded into Central and South America as well as the Caribbean. JetBlue started flying to London last year.

The two carriers will continue to operate as separate airlines until the closing of the deal, which is subject to regulatory approval. After that, passengers can be confused if they are flying Spirit aircraft that have not yet been upgraded.

JetBlue has some experience in these situations thanks to an alliance with American in the Northeast that allows carriers to sell seats on each other’s planes. JetBlue updated its website last year to better highlight differences in in-flight features such as business class seats or free Wi-Fi.

Despite the digging of comedians, in recent years the Spirit has improved its reliability – and in some respects it is doing better than the JetBlue.

According to the latest data available from the Department of Transportation, JetBlue ranked last among the top 10 airlines for on-time arrivals this year through May, while Spirit ranked seventh.

According to FlightAware, a third of JetBlue flights have been delayed this year and 4% cancelled. In comparison, just over a quarter of Spirit’s flights were late and 2.7% were cancelled.

JetBlue CEO Robin Hayes says improving reliability is a priority. The carrier cut growth plans, saying it doesn’t want to overstretch its crews and other resources.

“The big JetBlue that is late is not the best JetBlue,” said Henry Harteveldt, a former airline executive and founder of Atmosphere Research Group, a travel consulting firm.

Is this the end of cheap tickets?

The Biden administration has vowed to take a tough stance on both consolidation and inflation, so the disappearance of a budget airline could be a major problem. tough sale.

“Spirit may not be a very elegant experience, but they are cheap,” said William Kovacic, professor at the George Washington School of Law and former chairman of the Federal Trade Commission. “If they disappear as independent businesses… will that remove the source of downward pressure on the price?”

But JetBlue’s Hayes believes the airline needs to grow quickly and compete better with the big airlines that control more than three-quarters of the US market. Hayes argues that a larger JetBlue will mean relatively lower fares to more destinations.

Like some airline giants, JetBlue has already added certain low fares that mimic carriers like Spirit. These tickets also do not include seat assignments or other perks that were once standard for bus travel.

But JetBlue’s business model of offering more comfort costs more than Spirit’s, meaning it probably won’t offer as many cheap fares as Spirit does.

In the meantime, Frontier Airlines is already saying it’s happy to take a bigger share of the ultra-low price market after its deal with Spirit fell apart. Shortly after the airlines announced the end of their agreement, Frontier predicted it would grow by 30% next year and began selling tickets for 1 million seats at $19 each.

The airline will become the largest discount carrier in the US if Spirit is eventually acquired. Others include Allegiant and Sun Country.

“It just gives us a huge amount of room to grow,” said Frontier CEO Barry Biffle. “That’s why this is such a windfall for our employees and our shareholders.”

When does it happen?

Not right away. JetBlue and Spirit expect the deal to not receive regulatory approval until late 2023 or early 2024 and then close in the first half of 2024.

Airline integration is a long and expensive process. For example, United and Continental flight attendants didn’t even fly together until eight years after the merger of these airlines in 2010.

Aircraft upgrades could also take years, and JetBlue won’t be able to start that process with the Spirit fleet until at least 2025. But the airline notes that it recently fitted more than 100 of its Airbus aircraft with new interiors.

“We have a lot of recent experience on how to do this,” Hayes said.


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