The Sky’s the Limit After JetBlue Closes $3.8B Deal to Buy Spirit Airlines Now That Merger with Frontier Has Fizzled
It's another big win for an aviation company after JetBlue has announced that they are purchasing Spirit Airlines. The announcement
It's another big win for an aviation company after JetBlue has announced that they are purchasing Spirit Airlines.
The announcement comes immediately on the heels of Spirit and Frontier announcing that a planned merger will not be going forward as planned.
Jetblue Buys Spirit
JetBlue took to social media earlier today to announce the $3.8B deal.
The JetBlue Instagram shared, "We’re proud to announce JetBlue & @spiritairlines will come together to create a bigger, better JetBlue. After closing, the combined network will offer 1700+ daily flights to 125+ destinations—and the low fares and award-winning service you know and love.
Don’t worry–for now we remain two independent airlines, and tickets you’ve purchased on either JetBlue or Spirit, and points or benefits you’ve earned, are still valid.
We still have a lot of work to do before we close and we’re committed to keeping you informed."
The agreement to purchase comes after months of a contentious bidding war, and one day after Spirit announced that it would not be merging with Frontier as planned.
ABC News reports, "Spirit CEO Ted Christie is being thrust into the awkward position of defending a sale to JetBlue after arguing vehemently against it, saying that antitrust regulators would never let it happen.
'A lot has been said over the last few months obviously, always with our stakeholders in mind,' Christie said on CNBC. 'We have been listening to the folks at JetBlue, and they have a lot of good thoughts on their plans for that.'”
The real issue here though is clearly what can we do in the U.S. to make a more competitive airline industry against the large, big four airlines. We believe the most disruptive, the most effective thing that we can do is build a bigger JetBlue more quickly than we otherwise could.
Together, JetBlue and Spirit will make up just under 10% of the US air-travel market.
Spirit planes will be reconfigured to meet JetBlue standards, which embraces greater legroom. And Spirit employees can expect an increase in salaries.
Spirit has traditionally fit a traveler niche with its only real competitor being Frontier, appealing to those who need quick cheap flights and aren't as concerned with comfort.
With JetBlue taking over, many experts worry that the low-cost flight will disappear.
But travelers are excited; after all, Spirit has extraordinarily low customer satisfaction ratings.
Deal Comes Amid Record Instability
JetBlue's deal comes during unprecedented uncertainty in the airline industry.
Customers are complaining of chaos at the airports, with baggage going missing, canceled flights and inadequate staffing foremost among comments.
It's a perfect storm between a contracted industry trying to recover from pandemic-related restrictions, the same staffing shortages plaguing almost all customer services businesses, and a higher-than-expected travel surge as people take to the skies again now that COVID is less deadly and more people are vaccinated.
The good news for Spirit loyalists is that the JetBlue deal will increase their comfort, reliability and overall quality.
But with higher quality may come higher prices – and that's exactly what Spirit customers don't want.
The deal is expected to close no latter than the end of 2024 if all goes well.