Yesterday we learned that Spirit terminated its merger agreement with Frontier, after Spirit shareholders voted against it. Today a new merger agreement has been announced between Spirit and JetBlue, as the airlines are on the same page for the first time about a merger.
Continue reading: Official: JetBlue & Spirit Plan To Merge
Share your questions, experiences, and thoughts below.
Its more sensible to purchase a $108 basic economy airfare instead of $415 on American. I don’t think I’ll miss boarding first , first class upgrades , and meals. Its only a 3-4 hr flight . The US is in a recession and steamrolling towards a much deeper one. For those of you that track your spending I spent about $400+ on food and gas in July without changing my spending habits.
First off, as the big Spirit shareholders were in line to be nicely enriched by this deal (and we all know that's what's important) - there was no way this wasn't going to happen. The fact that Spirit will no longer exist is of no matter because they get a sweet chunk of dough. Simple as that.
Now, JetBlue's plans for their new toy are a lot more interesting to me. Yes, they are paying a ton for aircraft and employees. But, they're also getting Spirit's network. It gets them some relevance in many markets where they've had none. Like in the Midwest (where they basically don't exist). It strengthens them on the west coast too. And Spirit's Latin American market is even stronger than JetBlue's. So, I somewhat see the logic in theory though the amount of money being paid to make it happen is ridiculous.
In my opinion this deal is a massive L for the traveling public. F9/NK would have been a much more disruptive pricing force than B6/NK, as B6 is an LCC in name only. In addition, B6 will have to recoup the massive capex expenses they incur reconfiguring NK’s aircraft, and guess what their only lever to do so is? Raising ticket prices.
Besides, this transaction will leave B6 in a perilous position as America’s highest CASM airline, alongside a massive debt load. A weakened B6 is only good for AA/DL/UA/NK.
Anything that kills the ULCC business model is a win in my book. People seem to think that you can have $59 fares and have adequate levels of service. Doesn't work that way.
Although operationally Jet Blue doesn't seem all that much better than American.
I think what JetBlue really wants out of this are the slots at western US airports. They can’t grow unless they get those slots, which would make them a nation-wide carrier, not just a regional player. I’d bet that they’ll pick over Spirit assets and sell off a lot of them. I don’t think JetBlue will change their model to align with Spirit.
That’s an incredibly cheap way of acquiring more jets. Spirit currently has 180 jets in their fleet. For simplicity sake, let’s assume each has depreciated by 50% of list price. That would put total value at ~$9b. JetBlue is getting a huge discount. Then figure finding synergies and trimming redundancies. This makes a ton of sense.
JetBlue wants pilots and aircraft. They'll cherry pick the Spirit routes and slots, and dump the rest. Bye-bye yellow bus.
I bet the B6/NK merger will have to give up slots at FLL (and maybe MCO) to get regulatory approval from DOJ.
As someone who has flown through many airline mergers, I can’t recall any of them being a winning proposition for me as a consumer. Prices eventually stabilize higher, loyalty programs devalue along with the soft product. And another ULCC will sprout up in the wake.
And they can keep the Spirit brand and fees in place just long enough to pay for the merger. That's what Southwest did with AirTran.
There are no slots at any airport in the western US. It's all about pilots and aircraft.
Dumb take. Southwest became the airline it is today precisely because it did exactly what JetBlue is doing via this merger.
traditionally, a large portion of an airline's fleet would be leased, not owned. They often place the order themselves and then, upon delivery, sell them to a company like AerCap and lease the aircraft back. This allows airlines to scale the fleet up / down more easily, have a younger fleet, and optimize indebtedness + cash retention. For the planes that they actually "own", I would imagine they mostly finance them (as oppose to paying up front in cash) and make payments every month for many many years. Airlines just don't have the cashflow to buy majority of their fleets outright, up-front. For example, JetBlue's market cap is 2.6 billion. They have a fleet of 285 aircraft. Even if you valued the planes at half their list price, that would be ~$14 billion dollars worth of aircraft alone, or 5.5x the entire company's supposed worth. So, Jetblue isn't getting a bunch of "free" planes with the acquisition. They are more likely taking over a bunch of leases and financing plans that they will continue to have to pay market rates for in order to keep the planes around after the deal closes.
Unless you can jump between multiverse, how can you tell what would happen if the airline didn't merge. Your "winning proposition" seems to negatively corelate to airline mergers, or inflation?
Of course if prices don't stabilize higher, the airline(s) would fail. Which will reduce the market supply and guess what, increase in price!
What does inflation have to do with anything here? I think you got lost in your multiverse.
Yup, I understand how this all works. However, you left out the whole part about how airlines have to place orders years in advance and then the delivery trickles for years. This deal allows them to heavily accelerate the growth strategy that they have without waiting around for Airbus to make the planes.
Who needs service anyways, spirit was great if you knew what you were doing, why would i need a free water or soda i can fill up an empty water bottle before my flight. And their service when paying for drinks was quite good. Im gonna miss the Big Front Seat.
Well no americans can complain about gas prices, we have spent years refusing to offer the oil industry any help nor have we given them any reason or incentive to expand production or capacity. So expect high prices for a long long time.
Can I use my jet blue miles and AA miles now on spirit. Will the spirit plans be changed to jet blue. Spirit is cramped. Would never fly again. Will it be like jet blue
Consolidation almost always sucks. I always thought JetBlue and Spirit were too different to be merged, but at least it isn’t like with Alaska and Virgin America where the less premium product won out. RIP the Big Front Seat and the iconic taxicab livery. Isn’t it ironic that when JetBlue was founded, they initially wanted to call themselves “Taxi” and have a taxicab livery themselves?
No, WN was a flying city bus long before they started their mergers. It’s just a lousy airline that’s gotten bigger.
Think it will be a very large meal for Jetblue to eat - and they may die of indigestion. Also Jetblue's approach is very much the criticism they directed against Alaska/Virgin - but at least Alaska/Virgin , Alaska got it's hands on some very valuable slots at busy airports. BTW getting their "hands on" Spirit's fleet is not a consideration as most are leased - more likely they'll try and return the aircraft as soon as they can (& Frontier will get some cheap capacity).
Pretty sure JetBlue is only buying Spirit to improve its on-time performance. 😉
No, it’s about JetBlue wanting the slots. Spirit has them in the western US, JetBlue doesn’t. I doubt the pilots and aircraft were a primary concern to JetBlue making the acquisition offer.
You probably don’t live in NorthEast , people here love JetBlue and paying typically premium to fly nonstop with them …
Here’s what jetBlue needs to do once this fiasco is finalized. They’re not going to be a lcc anymore. Now’s the time to be a grown up.
1) add the big front seat to ALL B6 aircraft - 1x1 seating in two rows on the 190s. 1x2 or 2x2 seating on the 220’s. Add 2x2 seating on the 320/321’s. This will give them the opportunity to sell these seats as a premium economy or business “lite” to earn more revenue. Also offer some business “lite” perks such as an upgraded snack, priority boarding, enhanced miles, etc.
2) stop flying to some of the current NK cities that are only served two or three times per week. It’s horrible on scheduling aircraft and crews. If a flight can’t make it at least one time daily - stop flying to that destination.
3) keep the routes that they (B6) have not served before. NK has a lot of routes that work for them and those will continue to be beneficial to the new combined airline.
4) keep the routes that NK has established in IAH, AUS, DFW, ATL and others you probably know departing from your own airport. B6 was miserably absent from Texas and the Rockies to just west of the Mississippi River north to the Canadian border. They have lacked service in these areas since they started.
5) understand that the USA is way bigger than just flights to and from BOS and/or JFK. It’s time for them to truly be a “national” carrier.
6) integrate some of NK’s fees back into B6. We’re all used to paying to “personalize” our travel experience. This will bring the combined airline enhanced revenue.
7) don’t start another intra-California “bloodbath” by trying to offer flights every 30
minutes from the LAX region to the SFO Bay Area. It simply won’t work.
8) think outside the box to truly bring “service” back to the skies. When B6 started they had some really great ideas and that’s what made everyone want to fly them. Now’s their time to make this happen.
9) get rid of most of the B6 management team. They’re simply awful. NK has a better team that can “right the ship.”
10) have a dedicated timeline to have all of these enhancements done on-time so the team members will have a sense of belonging. Mergers/acquisitions/take-overs aren’t fun. They create a lot of stress on everyone. Now’s the time for them to get their ducks in a row and show the flying public they’re in this game to win us over!
Scott for the last time there are no slot controls in the western US!!!! Lack of access to gates yes…. Slots, no!
Seats don't recline on any Spirit Airlines flight I've been on in the past 10 years. Jet blue has DirecTV in every seat.
To me it's a no br@iner for JetBlue to survive over Spirit.