JetBlue & Spirit An...
 

JetBlue & Spirit Antitrust Trial Concludes, And Now We Wait

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A decision made by a judge in the coming weeks or months could have major implications for the future of the US airline industry, and in particular, for the future of JetBlue and Spirit…

Continue reading: JetBlue & Spirit Antitrust Trial Concludes, And Now We Wait

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15 Replies
(@Jason)
Joined: 3 years ago

Posts: 1

This will take longer than a few weeks.
The AA/B6 court case concluded in October last year and the decision came in May. I wouldn’t expect a decision here anytime soon.


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(@Tim Is So Done)
Joined: 3 years ago

Posts: 55

Shareholders are waiting for the deal to close, unlike with the NEA where the alliance was already in effect. This will be decided more quickly.


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(@AntJFK)
Joined: 7 years ago

Posts: 7

I'm no lawyer, but on its face blocking this merger (especially with the divestitures) would be illogical. The DOJ allowed the country's 6 largest carriers to combine into 3 mega-carriers. The DOJ allowed Southwest to gobble up AirTran and Alaska to acquire Virgin America. All of these decisions were made while JetBlue grew organically, and now that JetBlue has run out of resources to grow (whether its gate space, planes, pilots), it should be allowed the same opportunity to acquire a smaller competitor and continue growing. The public is more well served with a larger, stronger JetBlue that can more effectively compete against DL/UA/AA/WN/AS, while directly opening up opportunities for Frontier and Allegiant to compete in some of their largest markets.

Seems like a win-win to me.


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(@roger)
Joined: 7 years ago

Posts: 96

Horrible idea merging these two airlines........JetBlue today is nothing like the airline they were five years ago (unreliable as hell) and SPIRIT is just flat out awful. The integration alone will be ugly from reconfiguring the aircraft, redesigning the onboard product and training two very different cultures of employees. Bad idea allowing this to go thru in tougher economic times and I could see the new entity in a tailspin very quickly.


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Diamond
(@tim-dunn)
Joined: 5 years ago

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Posts: 7466

The real issue w/ B6/NK is unlike any of the current big 4 mergers or with the AS/HA merger which was just announced.
B6 is planning through the NK merger to eliminate a competitor in a low fare and cost category, something that hasn't happened in previous mergers.
The DOJ's case is based on harm to consumers that will lose the ability to purchase lower cost tickets w/ NK offers and the economy basic fares which the big 3 match (and WN offers but w/ its usual product attributes). Much of the testimony centered about where the threshold of harm should be drawn and what is a reasonable time period for the DOJ to wait for the market to readjust - and if competitors w/ fill the void that the loss of NK will provide. Those theories are completely untested and unproven in airline mergers.

and B6 and NK do have considerable overlap in FLL which will affect all of S. Florida


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 B212
(@B212)
Joined: 3 years ago

Posts: 25

I agree and now you have Alaska trying to merge with Hawaiian.

It's only fair to allow JetBlue kill itself off in a slow death.


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Diamond
(@nedskid)
Joined: 4 years ago

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Posts: 444

There aren't so many barriers to entry in S. Florida these days. FLL has room, especially as WN has moved its intl flying up the turnpike to MCO and is down to less than 40 flights a day - the lowest in non-Covid times in recent memory. I believe JetBlue had proposed giving up the new Terminal 5 with its 5 gates that would have FIS access, for which ground was just broken, but there's capacity now if someone wanted in to FLL with FIS access over in Terminal 1.

BOS/EWR/LGA - other than Frontier at LGA, do any LCCs want these assets? Allegiant is already in Newark and Boston and could have grown if it wanted to. It isn't like it is serving markets that have much competition. Avelo and Breeze I can't see really being interested. These are incredibly expensive places to operate on an ongoing basis, even just on transient charges like landing fees. They don't have the financial strength, or aircraft available, to go in with any sort of big showing which really would be needed to sustain ongoing operations. Is one result of this trial that the divestitures must go to a LCC? What if none want them (other than F9 at LGA)? It isn't like years ago when Southwest wanted in.... funny that when NK sold its 3 DCA slot pairs and moved to BWI, airlines like US and DL bid $1-1.5million... and WN started out north of $12 million each (clearly not knowing what they were really worth).

The WN/FL deal a decade ago ended up being little more than eliminating a competitor (and divesting most of that competitor's fleet to Delta, then failing to be able to compete at the level AirTran did against Delta). If they had been as realistic in what they planned to do with AirTran, would DOJ have challenged. Southwest said ATL would quickly be its largest station with 300+ flights a day, the 717 would open up many second/third tier markets, etc. etc. None of that happened. It's debatable whether WN really believed it was going to achieve that or not (I'm of the view they thought they would somehow pull it off).


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Diamond
(@tim-dunn)
Joined: 5 years ago

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Posts: 7466

The issue is not about giving up assets to allow a competitor to come in; it is about having a competitor that is willing to step in - according to the DOJ - and I see their point.
Allegiant doesn't compete against other carriers as NK does. Frontier has said that the ULCC model works but they couldn't possibly grow fast enough to take NK's place in all of the markets that would be lost.
The judge will have to decide if it is too costly to the public to allow a merger that would eliminate lower fares through fewer seats per aircraft in the B6 model and by giving the big 4 less reason to match ultra low cost carrier matching fares.
in markets such as FLL, it is a given that fares will go up. B6' commitment to add more service to FLL and grow in MCO is just responding to a growing market but doesn't mean the new seats will be priced the way NK would price them.


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Diamond
(@concordeboy)
Joined: 5 years ago

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Posts: 1211

You're using mergers that occurred up to a decade and a half ago, several of which would be viewed as anti-competitive and anti-consumer under the current administration's July 2021 E.O. to promote corporate competition as an economic strategy; as a means to say that it's illogical if this one isn't pushed through?

Doesn't work that way.

The question before the court isn't "what's fair to JetBlue's corporate growth strategy," its what's best for consumer protection.


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Diamond
(@concordeboy)
Joined: 5 years ago

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Posts: 1211

B6 is planning through the NK merger to eliminate a competitor in a low fare and cost category, something that hasn't happened in previous mergers.

"Come again?"

~signed, AirTran


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Diamond
(@tim-dunn)
Joined: 5 years ago

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Posts: 7466

First, AirTran and Southwest were both low cost carriers in the same category and
Second, I think the DOJ has realized they did consumers no favors by allowing WN to take over FL.
As much as B6 wants to think they should be able to do what other airlines have done - even if everything is equal - the DOJ doesn't have to make the same mistakes twice


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(@Jason)
Joined: 12 years ago

Posts: 1330

you write: The DOJ claims that fares would increase an average of 30% if JetBlue took over Frontier, but that’s not an apples-to-apples comparison; the airlines include different things with their fares, and most Spirit consumers end up paying a lot more in ancillaries

Dont you mean "30% if JetBlue took over Spirit"? Not Frontier? I'm confused.


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 CG
(@CG)
Joined: 6 years ago

Posts: 22

The retraining of Spirit employees would entail: do not have fear in your heart and do not hide when JetBlue customer approaches, they will not throw a punch at you like the old Spirit flyers would. LOL!! Also, training in customer demographic: JetBlue customer is not on government assistance other than an SBA loan for their start-up business, the Spirit flyer...well. LOL!!!


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 CG
(@CG)
Joined: 6 years ago

Posts: 22

If the merger goes through there is going to be such a world of difference. The Spirit hand to hand combats in mid air between passengers, passengers and staff, passengers and anything that moves will be a thing of the past, LOL!!!!


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(@Exit Row Seat)
Joined: 6 years ago

Posts: 339

WHAT IF:
Should the B6-NK merger get approval and AA win its appeal of the North East Alliance, JetBlue will be sitting in the cat bird seat.
The biggest issue will be changing the mindset of the Spirit employees to treat passengers as human beings and realize kindness is not a dirty word!


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