This week, Spirit Airlines finally gave in and agreed to sell to JetBlue Airways for $3.8 billion, hours after terminating a merger agreement with Frontier Airlines because it did not receive enough backing from shareholders.
There will be big improvements for travelers if the new accord succeeds in removing regulatory obstacles.
JetBlue has established a strong reputation for providing comfortable services to its customers, such as reasonably spacious legroom, seatback screens, live television, free Wi-Fi, and complimentary food like Cheez-Its and Stellar vegan butter pretzel braids. There is also a business class option with lie-flat seats.
Spirit, on the other hand, has turned into a joke due to its basic service. Passengers must pay extra for “optional services” like carry-on luggage and the ability to choose a seat, and the cabins of its bright yellow flights are more crowded.
“It’s historic. This is the first time anyone wanted Spirit Airlines,” said the host Stephen Colbert on “The Late Show with Stephen Colbert” on Thursday about the deal.
However, Spirit has quickly and economically grown by providing inexpensive travel options that, in some cases, cost less than a movie ticket or a few burgers. The airline offers a “Big Front Seat” for $250 that provides 36 inches of legroom.
Here are some things passengers might expect if the two separate airlines go ahead with their merger plans:
How does JetBlue plan to deal with Spirit?
Spirit has the aircraft and pilots to assist JetBlue in its goal of expanding, and JetBlue wants to do so as well. The New York-based airline intends to transform Spirit’s aircraft in JetBlue’s fashion by taking out the tightly packed seats in favour of a roomier configuration with additional amenities.
After American, Delta, United, and Southwest, the combined airlines would rank as the fifth-largest carrier in the US. Each company has a substantial presence in Florida and has recently expanded into Central and South America as well as the Caribbean. Last year, JetBlue began offering flights to London.
Prior to the transaction’s closing, which is pending regulatory clearance, the two airlines will continue to operate independently. If they are travelling on Spirit aircraft that have not yet undergone the necessary modifications, passengers may become perplexed thereafter.
Due to its partnership with American in the Northeast, which enables the carriers to sell seats on each other’s aircraft, JetBlue has considerable experience dealing with such circumstances. JetBlue updated its website last year to better illustrate the variations in onboard amenities like business class seats or free Wi-Fi.
Despite the jokes, Spirit has become more dependable recently and, in some ways, is doing better than JetBlue.
According to the most recent information available from the Transportation Department, Spirit ranked seventh and JetBlue finished worst among 10 airlines in terms of on-time arrivals this year through May.
According to flight tracker FlightAware, a third of JetBlue’s flights this year have been delayed and 4% have been cancelled. Comparatively, a little over a quarter of Spirit’s flights landed late and 2.7% were cancelled.
According to Robin Hayes, CEO of JetBlue, increasing reliability is a top concern. The carrier says it has reduced its growth goals because it does not want to put an undue strain on its personnel or other resources.
“A bigger JetBlue that is late is not a better JetBlue,” remarked Henry Harteveldt, a former airline CEO and the founder of the consultancy company Atmosphere Research Group.
Could this be the end of cheap rates?
It may be difficult to convince people that an ultra low-cost airline will go away because the Biden administration has committed to take a stern position against both consolidation and inflation.
“Spirit might not be an elegant experience, but they are cheap,” Professor at the George Washington School of Law and former head of the Federal Trade Commission, William Kovacic, said. “If they disappear as an independent enterprise … is that going to remove a source of downward pressure on price?”
But according to JetBlue’s Hayes, the airline needs to expand swiftly in order to better compete with large carriers that dominate more than 75 percent of the American market. According to Hayes, a larger JetBlue would offer more reasonably inexpensive flights to more locations.
JetBlue has already implemented certain low fares that resemble those of airlines like Spirit, just like some of the industry giants. Additionally, those tickets lack other benefits that were previously included with coach fares, like as seat assignments.
However, JetBlue’s business strategy of providing more amenities is more expensive than Spirit’s, so it probably won’t provide as many of the incredibly low prices that Spirit provides.
After its merger with Spirit Airlines fell through, Frontier Airlines has already stated that it is happy to take on a larger portion of the ultra-low-cost market. Soon after the airlines announced the termination of their agreement, Frontier forecasted a 30 percent increase in revenue for the upcoming year and launched a fare sale with 1 million seats available for $19 each.
If the airline eventually acquires Spirit, it will grow to be the biggest cheap carrier in the US. Sun Country and Allegiant are two more.
“That just gives us a huge amount of breathing room for growth,” said Frontier CEO Barry Biffle. “That’s why this is such a windfall for our employees and our shareholders.”
What day will this take place?
Not at this time. JetBlue and Spirit anticipate that the transaction won’t close until the first half of 2024 after receiving regulatory approval in late 2023 or early 2024.
It takes time and money to integrate airlines. For instance, it took eight years following the 2010 merger of United and Continental for flight attendants from those two airlines to even fly together.
JetBlue wouldn’t be able to begin retrofitting Spirit’s fleet of aircraft until at least 2025 because that procedure can take years. However, the airline points out that it just fitted new cabins to more than 100 of its Airbus aircraft.
“We’ve got a lot of recent experience in how to do it,” said Hayes.