If you can’t beat ’em, join ’em (or in this case, BUY those)!
Two airlines are in talks to finalize a formal merger, forming what would be the fifth largest airline in the US
On Thursday, the announcement that JetBlue Airways is set to buy Spirit Airlines for $3.8 billion in an all-cash offer hit the public after the discount airline scrapped an earlier merger agreement with Frontier Airlines just the day before.
If approved by regulators, the takeover would be the first major US airline deal since 2016, when Alaska Airlines beat out JetBlue to buy Virgin America. The merger would also leave Frontier as the nation’s largest discount carrier.
“If a JetBlue-Spirit merger happens, we believe Frontier will largely inherit the keys to the low-cost kingdom in the US,” noted JP Morgan airline analyst Jamie Baker. CNBC.
JetBlue executives say taking over Spirit would accelerate its growth by giving it access to more Airbus planes and pilots, helping it compete with larger carriers such as US, Delta, united AND South-westwhich control an overwhelming part of the American market.
What could this mean for travelers?
Current JetBlue CEO Robin Hayes addressed the changes in an email sent to customers, per USA today. “As you can imagine, combining two airlines takes time and we still have a lot of work to do behind the scenes. After closing, the combined airline will operate under the JetBlue brand. Eventually, all Spirit aircraft will be converted to JetBlue , but for now nothing is changing — we remain two independent airlines until the transaction closes,” he wrote. “Any ticket you purchased on JetBlue or Spirit is still valid and all your points and benefits remain exactly the same. We’ll keep you posted as we have additional details to share.”
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Additionally, Spirit Airlines’ frequent fliers are used to extremely low fares, something that will inevitably change as JetBlue competes more directly with legacy full-service carriers and is forced to offer higher rates in most markets.
There is a long way to go in terms of combining company and fleet cultures in the coming years. Although both airlines fly similar planes, they are said to be built and customized very differently, meaning that reconfiguring Spirit to JetBlue’s aircraft standards is likely to be a lengthy process.
The flow of in-flight service at the two airlines also changes, so it’s assumed that Spirit staff will undergo updated training to match its new owners’ company-wide practices.
JetBlue Airlines has been operating for more than 20 years. It was founded under the name “NewAir” in 1999 by David Neeleman, a former employee of Southwest Airlines.