What you need to know
- JetBlue’s $3.8 billion takeover of Spirit could mean big changes for air travelers.
- JetBlue wants to get bigger, and Spirit has the planes and pilots to help it do that.
- Despite the comedians’ digs, Spirit has improved its reliability in recent years — and by some measures it’s better than JetBlue.
Spirit Airlines yielded this week and agreed to sell himself to JetBlue Airways for $3.8 billion a few hours later pulling away merger agreement with Frontier Airlines which failed to win sufficient shareholder support.
The new deal will mean big changes for travelers if it clears regulatory hurdles.
JetBlue has built a reputation for passenger amenities like relatively large legroom, seatback screens, live TV, free Wi-Fi and free snacks like Cheez-Its and Stellar vegan butter pretzels. He also offers business classwith reclining seats.
Spirit, on the other hand, became the climax for his bare service. Cabins on its bright yellow planes are tighter, and passengers must pay extra for “extras” such as hand luggage and seat selection.
“This is a historic event. This is the first time anyone has ever wanted Spirit Airlines,” “The Late Show” host Stephen Colbert quipped about the deal on Thursday.
Still, Spirit has expanded quickly and profitably, offering cheap tickets to vacation hotspots that sometimes cost less than a trip to the movies or a few burgers. The airline’s “Big Front Seat,” however, offers 36 inches of legroom for an extra charge of up to $250.
As the two different airlines push forward with their merger plans, passengers can expect:
What are JetBlue’s plans for Spirit?
JetBlue wants to get biggerand Spirit has planes and pilots to help him do it. The New York-based carrier plans to upgrade its JetBlue-style Spirit planes by opting for boxed seats for a more spacious layout with more amenities.
Combined, these airlines would become the nation’s fifth-largest carrier, second American, Delta, United and South-western. Both have a large presence in Florida, and each has expanded into Central and South America and the Caribbean in recent years. JetBlue started last year fly to London.
The two carriers will continue to operate as separate airlines pending the closing of the transaction, which is subject to regulatory approval. After that, passengers may be confused if they fly on Spirit planes that have not yet been upgraded.
JetBlue has some experience with these situations thanks to its alliance with American in the Northeast, which allows the carrier sell seats on each other’s planes. Last year, JetBlue updated its website to better highlight differences in onboard features such as business class seats or free Wi-Fi.
Despite the comedians’ digs, Spirit has improved its reliability in recent years — and by some measures it’s better than JetBlue.
JetBlue ranked dead last among the 10 airlines for on-time arrivals this year through May, while Spirit ranked seventh, according to the latest available data from the Department of Transportation.
A third of JetBlue flights have been delayed and 4% canceled this year, according to flight tracker FlightAware. By comparison, just over a quarter of Spirit flights arrived late and 2.7% were canceled.
JetBlue CEO Robin Hayes says improving reliability is a priority. The carrier has reduced growth plans, saying it doesn’t want to overstretch its crews and other resources.
“A bigger JetBlue that is late is not a better JetBlue,” said Henry Harteveldt, a former airline executive and founder of Atmosphere Research Group, a travel industry consulting firm.
Is this the end of cheap fares?
The Biden administration has vowed to take a tough stance on consolidation and inflation, so the demise of the ultra-low-cost airline could be hard to sell.
“Spirit may not be an elegant experience, but it’s cheap,” said William Kovacic, a professor at the George Washington School of Law and former chairman of the Federal Trade Commission. “If they disappear as an independent enterprise … will that remove a source of downward pressure on prices?”
But JetBlue’s Hayes says the airline needs to grow quickly and better compete with larger airlines that control more than three-quarters of the U.S. market. Hayes argues that a larger JetBlue will mean more relatively lower fares to more destinations.
Like some airline giants, JetBlue has already added certain low rates which mimic mediums such as Spirit. These tickets also don’t come with seat assignments or other privileges that were once standard on bus travel.
But JetBlue’s business model, which offers more comfort, is more expensive than Spirit’s, meaning it likely won’t offer as many low fares as Spirit does.
Frontier Airlines, meanwhile, is already saying it is excited to take a bigger share of the ultra-low-cost market after its Spirit deal collapsed. Shortly after the airlines announced the end of the deal, Frontier predicted it would grow 30% next year and began selling fares for 1 million seats at $19 apiece.
“It just gives us tremendous room to grow,” Frontier CEO Barry Biffle said. “That’s why this is such a windfall for our employees and our shareholders.”
When does this happen?
Not immediately. JetBlue and Spirit expect the deal to not receive regulatory approval until late 2023 or early 2024 and then close in the first half of 2024.
Integrating airlines is a long and expensive process. For example, United and Continental flight attendants didn’t even fly together eight years after the merger of these airlines in 2010.
Retrofitting the planes could also take years, and JetBlue won’t be able to begin that process with the Spirit fleet until at least 2025. But the airline notes that it recently fitted more than 100 of its Airbus planes with new interiors.
“We have a lot of recent experience in how to do that,” Hayes said.