Low Cost & Regional

JetBlue, Spirit continue to advance merger plan

JetBlue and Spirit have responded to the filing of a complaint by the US Department of Justice seeking to block the companies’ merger.

JetBlue and Spirit said they would continue to advance their plan to create a ‘compelling national challenger’ to the Big Four US airlines, which control about 80% of the market after years of industry consolidation that the DOJ itself approved. “By coming together, we will expand JetBlue’s unique offering – where customers do not have to choose between a low fare and a great experience – to boost competition nationally,” the partners said in a joint statement.

JetBlue said it has proved its ability to force the legacy carriers to react to JetBlue’s low fares and service quality pointing to the fact that the DOJ itself said that “in the face of consolidation, JetBlue has provided an important and steadfast source of competition” and that “JetBlue’s reputation for lowering fares is so well known in the airline industry that it has earned a name: the ‘JetBlue Effect’.”

JetBlue chief executive Robin Hayes said: “Customers deserve a competitive airline marketplace and we will pursue this merger to ensure they get it, continuing to disrupt the legacy airlines with low fares and award-winning service that even the DOJ has applauded. We believe the DOJ has got it wrong on the law here and misses the point that this merger will create a national low-fare, high-quality competitor to the Big Four carriers which – thanks to their own DOJ-approved mergers – control about 80% of the U.S. market. There is too much at stake for the DOJ to prevent us from bringing the JetBlue difference to more customers in more markets.”

Spirit chief executive Ted Christie added: “We disagree with the DOJ’s decision to seek to block the proposed merger, which will benefit consumers and employees. We will vigorously defend our position that a combined JetBlue and Spirit will be a game changer for customers nationwide, creating the most compelling national low-fare challenger to the dominant US carriers. Together, we intend to democratize flying for travellers across the country – a goal we believe is worthy of the government’s support.”

They said that because many Spirit aircraft will continue to fly in their current configuration during the retrofitting process after the transaction closes, there will be no short-term change in capacity.

As JetBlue retrofits Spirit’s aircraft with its passenger experience (e.g., adding more leg room and other onboard amenities), the combined airline will also be able to meaningfully increase aircraft utilisation, offsetting seats removed in the retrofitting process by adding more flights. This will result in more seats with Blue Basic fares, and coupled with the rapid growth of the ULCCs, will create a more competitive environment and ongoing access for the most price-sensitive customers.

Hayes continued: “Putting the JetBlue’s increased legroom and free amenities on Spirit aircraft is a big win for consumers, and we can offset any loss of seats with increased flying and through ULCC growth. You shouldn’t have to choose between a low fare and a great experience, so the government should celebrate an expansion of JetBlue’s low fares and customer favourites like the most legroom in coach, free Wi-Fi, live seatback TV, and free snacks coming to Spirit’s fleet.”

The two airline chiefs added that the merger benefits were clear and had attracted wide support. The benefits of a JetBlue and Spirit combination have been widely recognised by consumer advocates, labour leaders, legislators, local government officials, industry experts, and academics in addition to its own workforce.

“We are confident a court, too, will recognize the merits of our case,” they said.

US Justice Department blocks JetBlue $3.8 billion Spirit deal

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