Passengers line up at the Spirit Airlines check-in counter at Orlando International Airport.
Paul Hennessey | light flare | Getty Images
Spirit Airlines relented this week and agreed to sell itself to JetBlue Airways for $3.8 billion, hours after scrapping a merger deal with Frontier Airlines that failed to garner enough shareholder support.
The new deal would mean big changes for travelers if it clears regulatory hurdles.
JetBlue has earned a reputation for passenger comforts like relatively generous legroom, seatback screens, live TV, free Wi-Fi, and free snacks like Cheez-Its and pretzel braids with Stellar vegan butter. It also offers business class, with reclining seats.
Spirit, on the other hand, has become a punchline for his stripped-down serve. Cabins on its bright yellow planes are cramped, and passengers have to pay extra for “optional services” like carry-on baggage and seat selection.
“This is historic. This is the first time anyone has wanted Spirit Airlines,” “The Late Show” host Stephen Colbert joked of the deal Thursday.
Yet Spirit has grown rapidly and profitably by offering cheap tickets to vacation hotspots that can sometimes last less than a trip to the movies or a few burgers. The airline’s “Big Front Seat,” however, offers 36 inches of legroom for up to $250.
As the two separate airlines move forward with their merger plans, here’s what passengers can expect:
What are JetBlue’s plans for Spirit?
JetBlue wants to get bigger, and Spirit has the planes and the pilots to help it do it. The New York-based carrier plans to upgrade Spirit’s planes in the style of JetBlue, removing boxed seats for a roomier layout with more amenities.
Together, the airlines would become the nation’s fifth-largest carrier, behind American, Delta, United and Southwest. Both have a large presence in Florida and each has expanded into Central and South America as well as the Caribbean in recent years. Last year JetBlue started flying to London.
The two carriers will continue to operate as separate airlines until closing of the agreement, which is subject to regulatory approval. Subsequently, passengers may be confused if they fly Spirit aircraft that have not yet been upgraded.
JetBlue has some experience with such situations through its alliance with American in the Northeast, which allows carriers to sell seats on other people’s planes. Last year, JetBlue revamped its website to better highlight differences in onboard features such as business class seating or free Wi-Fi.
Despite the digs from comedians, Spirit has improved its reliability in recent years – and fares better than JetBlue in some respects.
JetBlue was last among 10 airlines in on-time arrivals this year through May, while Spirit ranked seventh, according to the latest available data from the Department of Transportation.
So far this year, a third of JetBlue’s flights have been delayed and 4% have been canceled, according to flight tracker FlightAware. By comparison, just over a quarter of Spirit’s flights arrived late and 2.7% were cancelled.
JetBlue CEO Robin Hayes says improving reliability is a priority. The carrier scaled back its growth plans, saying it didn’t want to overstretch its crews and other resources.
“A bigger JetBlue that’s behind is not a better JetBlue,” said Henry Harteveldt, a former airline executive and founder of Atmosphere Research Group, a travel industry consultancy.
Is this the end of cheap fares?
The Biden administration has pledged to take a tough stance on both consolidation and inflation, so the demise of an ultra-low-cost airline could be a tough sell.
“The mind may not be an elegant experience, but they’re 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 business… 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 the big airlines that control more than three-quarters of the US market. Hayes argues that a larger JetBlue would mean relatively lower fares to more destinations.
Like some of the airline giants, JetBlue has already added some low fares that mimic carriers like Spirit. These tickets also do not come with seat assignments or other perks that were once standard with a coach fare.
But JetBlue’s business model of providing more comfort costs more than Spirit’s, meaning it probably won’t offer as low fares as Spirit.
Frontier Airlines, meanwhile, says it is already happy to take a bigger slice of the ultra-low-cost market after its failed Spirit deal. Shortly after the airlines announced the end of their deal, Frontier predicted it would increase by 30% next year and launched a fare sale with 1 million seats at $19 each.
The airline will become the largest discount carrier in the United States if Spirit is ultimately acquired. Others include Allegiant and Sun Country.
“It just gives us huge leeway for growth,” Frontier CEO Barry Biffle said. “That’s why it’s such a boon for our employees and our shareholders.”
When is this happening?
Not immediately. JetBlue and Spirit expect the deal to only gain regulatory approval in late 2023 or early 2024, and then close in the first half of 2024.
Airline integration is a long and costly process. For example, United and Continental flight attendants didn’t even fly together until eight years after the airlines merged in 2010.
Modernizing planes can also take years, and JetBlue could not start that process with the Spirit fleet until at least 2025. But the airline notes that it recently outfitted more than 100 of its Airbus planes with new interiors. .
“We have a lot of recent experience on how to do that,” Hayes said.