“The combination of the two airlines would position JetBlue as the most compelling national low-fare challenger to the four large dominant US carriers by accelerating JetBlue’s growth,” said JetBlue in its statement.
Spirit said that it “will work with its financial and legal advisors to evaluate JetBlue’s proposal and pursue the course of action it determines to be in the best interests of Spirit and its stockholders.”
For its part, Frontier defended its offer as the superior deal for passengers and shareholders.
“A combined Spirit and Frontier will deliver $1 billion in annual savings for consumers and offer even more ultra-low fares to more places nationwide, creating America’s most competitive ultra-low fare airline,” Frontier said, adding that the combination would provide “shareholders with substantial upside potential for the combined company as a result of the merger synergies.”
Both Spirit and Frontier operate as what is known in the industry as ultra-low cost carriers, with very low base fares and extra charges for just about anything else a passenger needs, including even carry-on baggage.
While passengers may like the low fares Spirit and Frontier offer, they have generally given the airlines poor customer satisfaction grades.
Spirit had by far the highest number of passenger complaints in 2021, with 11.5 complaints per 100,000 passengers, according to stats kept by the US Department of Transportation. JetBlue had the second most complaints on that basis with 6.4, but that was down 43% from a year earlier. Frontier had the third most in the industry with 5.8. IN 2020, Frontier had by far the worst rate of complaints when it recorded 49.3 complaints per 100,000 customers.
“Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue has shown it’s possible to have both,” said Robin Hayes, JetBlue CEO.
Frontier played to that issue, saying its deal would be far better for airline competition. It argued a JetBlue-Spirit combination would reduce competition and result in higher fares.
“It is surprising that JetBlue would consider such a merger at this time given that the Department of Justice is currently suing to block their pending alliance with American Airlines,” said Frontier.
But only 11% of the routes of JetBlue and Spirit overlap with each other, compared to 18% overlap for Frontier and Spirit, according to data from aviation analytics firm Circium. That suggests JetBlue’s proposed combination with Spirit would represent less of a reduction in competition.
Quoted from Various Sources
Published for: The Bloggers Briefing