Last week JetBlue Airways finally succeeded in its bid to purchase Spirit Airlines, paying $3.8 billion to acquire the low-cost carrier. In doing so, the New York-based airline saw off rival attempts by Frontier Airlines to merge with Spirit, with negotiations between the two breaking off just hours before JetBlue was proclaimed victorious.
Provided it passes checks by the Justice Department, the JetBlue-Spirit acquisition is set to create the country’s fifth largest airline, coming in just behind American Airlines, Delta, United and Southwest. Such a substantial shake-up is bound to create changes for passengers, though perhaps not immediately.
When Is This All Going To Happen?
Not for a while is the short answer. The Justice Department is unlikely to approve the deal before late 2023 or even early 2024. Provided that goes smoothly, analysts predict the deal will likely close in the first two quarters of 2024.
After that it could still be years before the two airlines are fully integrated. Spirit aircraft are not expected to be renovated in JetBlue insignia until at least 2025.
What Will Passengers Notice?
A marriage between JetBlue and Spirit might seem unusual to many airline passengers; the one airline being associated with comfy seats, free snacks and complimentary WiFi, while the other is more known for its stripped back approach to budget travel.
However, if the deal goes ahead customers could benefit from the best of both worlds: with a larger economy of scale allowing JetBlue to keep costs low while still delivering on amenities.
What About Delays?
Over the years, Spirit Airlines has become a staple for late night comics, who like to joke about the airline’s frequent delays and cancellations. However, this reputation might just be a little unfair. So far this year, Spirit has been the 7th best airline for on-time arrivals -according to the Department for Transportation - while its soon-to-be parent company JetBlue only ranks 10th. Likewise, some 4% of JetBlue’s flights have been cancelled this year, compared to 2.7% of Spirit’s.
JetBlue CEO Robin Hayes has said improving reliability is an absolute priority for the remainder of 2022 after the airline was criticised for sustaining delays to one third of its flights so far this year. But with JetBlue looking to inherit a much larger fleet in the near future, keeping everything running on time is set to become a much bigger challenge.
Is the Merger Controversial
There are some voices from within both government and the airline industry who worry that the buyout will create too much consolidation in the airline industry.
In particular, regulators are concerned that once the deal goes through, JetBlue will control over 50% of the lucrative Fort Lauderdale market, allowing the airline to hike up airfares at the expense of passengers.
These fears of monopoly have been dismissed by Hayes, who said, JetBlue and Spirit isn't going to dominate in any market,"
He added that "Even in Fort Lauderdale with 50% share, there are still over 20 airports where you have an airline with more market share than that."