Analysts are warning that JetBlue’s merger with Spirit will eliminate one of America’s largest low-cost airlines

JetBlue and Spirit Airlines announced Thursday that they have reached agreement on a merger that would create the fifth-largest airline in the United States

The companies characterized the $3.8 billion merger as creating a “national low-fare challenger” to other major airlines.

“Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to lower fares on the Big Four airlines,” JetBlue CEO Robin Hayes said in a statement.

But shutting down Spirit, America’s largest ultra-low-cost airline, risks eliminating a key option for the country’s most budget-conscious travelers.

“Spirit has made flying possible for so many people who might not have been able to afford it before,” said Scott Mayerowitz, editor-in-chief of ThePointsGuy.com, a travel website.

Though Spirit may not offer the same perks as higher-priced airlines, like free snacks or inflight entertainment, he said, “Flying cross-country for $99 is a miracle.”

“There are a lot of people out there who are very happy with it, and I think that’s what we’re risking losing this super cheap option,” Mayerowitz said.

Flight booking sites show the cheapest route from the New York area to Orlando — one of the busiest routes in the country — currently costs just $126 when booking a round-trip ticket using Spirit as a one-way ticket and Frontier, another low-cost airline, as second.

JetBlue and Spirit aircraft at Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida on May 21, 2022.
JetBlue and Spirit aircraft at Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida on May 21, 2022.Eva Marie Uzcategui/Bloomberg via Getty Images file

Henry Harteveldt, president of travel consultancy Atmosphere Research, agreed that the loss of Spirit would turn the travel market upside down, particularly for lower-income air travelers.

But he said the US Department of Justice, which has the power to review mergers and take legal action to block them, would likely extort concessions from JetBlue to ensure the airline continued to offer traditional Spirit travelers low-cost options post-merger offers.

Harteveldt added that while lowest-income Americans could be hurt by JetBlue’s purchase of Spirit, the presence of a larger airline catering to budget travelers is putting pressure on airline industry giants — American, Southwest, Delta and United – could exercise the right to continue lowering their tariffs.

“What makes me feel better about this merger is that JetBlue already has a strong value proposition,” Harteveldt said.

JetBlue and Spirit are currently the sixth and seventh largest airlines in the country by passenger miles, according to federal data from the Bureau of Transportation Statistics. The companies expect to complete the regulatory process and close the transaction in the first half of 2024.

https://www.nbcnews.com/business/corporations/jetblue-spirit-merger-analysis-ticket-prices-competition-outlook-rcna40450 Analysts are warning that JetBlue’s merger with Spirit will eliminate one of America’s largest low-cost airlines

Fry Electronics Team

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