How JetBlue’s takeover of Spirit could change air travel

Passengers wait in line at the Spirit Airlines check-in counter at Orlando International Airport.

Paul Hennessy | Light Rocket | Getty Images

Spirit Airlines backed down this week and agreed to sell itself to JetBlue Airways for $3.8 billion, hours after it scrapped a merger agreement with Frontier Airlines that failed to garner enough shareholder support.

The new deal means big changes for travelers if it crosses regulatory hurdles.

JetBlue has built a reputation for passenger amenities like relatively generous legroom, seat-back screens, direct TV, free Wi-Fi, and free snacks like plaits of Cheez-Its and Stellar vegan butter. They also offer business class, with flat seats.

By contrast, the soul has become a piercing source for its abstract service. The cabins on its light-yellow planes are more cramped, and passengers have to pay extra for “optional services” like carry-on baggage and a seat.

“It’s historic. This is the first time anyone has ever wanted Spirit Airlines,” Stephen Colbert, host of The Late Show, added on Thursday.

However, Spirit has expanded rapidly and profitably by offering cheap tickets to vacation spots that can sometimes work for less than a trip to the movies or a few burgers. However, the airline’s “large front seat” offers 36 inches of legroom for an additional cost of up to $250.

As the two premium carriers move ahead with their plans to combine, here’s what passengers can expect:

What are JetBlue’s plans for Spirit?

JetBlue wants to grow, and Spirit has the planes and pilots to help it do just that. The New York-based carrier plans to modify Spirit planes in JetBlue style, removing boxed seats for a more spacious design with more amenities.

Combined, the airlines will become the fifth largest airline in the country, after America, Delta, United and Southwest. Both have a large presence in Florida and both have expanded to Central and South America as well as the Caribbean in recent years. Last year JetBlue began flying to London.

The two companies will continue to operate as separate airlines even after the deal closes, which is subject to regulatory approval. Then, passengers may be confused if they’re flying in Spirit planes that haven’t yet been upgraded.

JetBlue has some experience in such situations with its alliance with America in the Northeast, which allows airlines to sell seats on each other’s planes. Last year, JetBlue revamped its website to better highlight the differences in onboard features such as business class seats or free Wi-Fi.

Despite the digs by comedians, Spirit has improved its reliability in recent years — and it’s way better than JetBlue by some measures.

JetBlue was last of 10 airlines to arrive on time this year through May, while Spirit ranked seventh, according to the most recent data available to the Department of Transportation.

So far this year, a third of JetBlue’s flights have been delayed and 4% canceled, according to FlightAware flight tracking. By comparison, just over a quarter of Spirit’s flights arrived late and 2.7% were cancelled.

Robin Hayes, CEO of JetBlue, says improving reliability is a priority. The carrier has scaled back growth plans, saying it does not want to increase its crews and other resources.

“A bigger JetBlue delay is not a better JetBlue,” said Henry Hartfeldt, former airline CEO and founder of Atmosphere Research Group, a travel industry consultancy.

Is this the end of cheap prices?

The Biden administration has vowed to take a tough stance on both consolidation and inflation, so the disappearance of an ultra-low-cost airline could be a tough sell.

“Spirit may not be an elegant experience, but it is cheap,” said William Kovacic, a professor at George Washington College of Law and past chair of the Federal Trade Commission. “If they disappear as a standalone…will that remove a source of downward pressure on the price?”

But JetBlue’s Hayes says the airline needs to grow quickly and compete better with major airlines that control more than three-quarters of the US market. Hayes argues that a larger JetBlue could mean relatively lower fares to more destinations.

Like some of the giant airlines, JetBlue has already added certain low fares that mimic airlines like Spirit. These tickets also do not come with seat assignments or other perks that were previously standard with bus fare.

But the JetBlue business model that offers more amenities costs more than the Spirit model, which means it likely won’t offer as many lower prices as Spirit.

Going forward, Frontier Airlines already says it is happy to take a larger share of the ultra-low-cost market after the Spirit deal collapsed. Shortly after the airlines announced their agreement was ending, Frontier predicted it would grow 30% next year and began selling a million-seat fare for $19 apiece.

The airline would become the largest discount company in the United States if Spirit was eventually acquired. Others include Allegiant and Sun Country.

“This gives us a tremendous amount of breathing room to grow,” said Barry Bevel, CEO of Frontier. “That’s why this is a windfall for our employees and shareholders.”

When does this happen?

Not off. JetBlue and Spirit expect the deal not to gain regulatory approval until late 2023 or early 2024, and then close in the first half of 2024.

Incorporating airlines is a long and expensive process. For example, United and Continental flight attendants did not fly together until eight years after those airlines merged in 2010.

Retooling aircraft can also take years, and JetBlue won’t be able to start that process with the Spirit fleet until at least 2025. But the airline notes that it recently equipped more than 100 of its Airbus planes with new interiors.

“We have a lot of recent experience with how to do that,” Hayes said.

Leave a Comment