JetBlue and Spirit each have a large market share at FLL and MCO. There has not been much coverage on the latest news around the JetBlue-Spirit merger. After bidding has finished and we found out that JetBlue won the battle, it’s been fairly quiet around the deal while regulators evaluate it. But a group of Florida-based travelers and travel agents filed a lawsuit to stop it from happening.
The reason, which will essentially eliminate Spirit, must be stopped, they say, because it would cause airfares to rise out of major Florida airports where the two have large shares of the market. There is fierce competition between the two airlines at Fort Lauderdale-Hollywood (FLL) and Orlando (MCO), which are of particular concern.
The Fort Lauderdale airport is currently dominated by Spirit, which has 30% of the market share, and JetBlue has 19%. 19 routes overlap between the two at FLL and 12 in Orlando. According to the Palm Beach Post, the lawsuit alleges that Spirit is “a significant price-cutting rival of JetBlue, as well as a rival of the legacy carriers and other low-cost carriers,” and
A merger would allow JetBlue to gain a majority market share on more than a dozen routes where neither it nor Spirit currently dominate, and it would eliminate Spirit’s price-cutting.
As one of the few if not the principal remaining competitive forces in the market, Spirit’s continued existence is crucial to preserving and protecting the minimal amount of competition that exists in the airline industry today.”
Suit alleges Spirit is the only one who can restore competition
In addition (and perhaps the finest piece of praise Spirit has ever received), Spirit will restore competition in the airline industry if there is to be any.
According to JetBlue’s CEO Robin Hayes, by acquiring Spirit, the airline will be able to grow and compete with the larger airlines controlling over three quarters of the US market. It is indeed JetBlue’s belief that combining with Spirit will create a low-fare, national alternative to the dominant Big Four airlines.
In exchange for better comfort and OTP
While JetBlue wants to replace the characteristic bare-bones black and yellow seats on Spirit’s A320 family fleet with a more premium offering, a few other things might improve as well. When it comes to on-time performance, JetBlue came in seventh place in 2022. (Frontier did one better, reaching sixth.) Spirit did not even make the top ten.
The merger is expected to take place in 2024, provided regulators approve the deal, and if this lawsuit – which touches upon matters the DOT will closely monitor – is unsuccessful.