The current bandwagon in the media is that the Biden Administration killed Spirit by preventing it combining with JetBlue. Throngs of budget-seeking consumers are out of luck.
The Feds’ contention that it would have reduced competition was typical Buttigieg head-in-the-politics ignorance. If JetBlue could have accessed the Spirit airplanes and pilots, it could have theoretically been able to offer lot more mainline-quality competition to the Big Four.
Getting another 100+ airliners, plus pilots plus facilities to handle them, would have allowed B6 to expand in the near term. It had the market brand presence, and strong consumer loyalty. No waiting for the production lines at Toulouse and Mobile. Instant lift to add competition in major markets, not just price-sensitive leisure routes. Super move, in theory, not considering a whole passel of other issues.
Theory is one thing. The price tag was another. The DOT’s poorly conceived and chintzy PR stunt to “help the consumer” was just political ballroom dancing. The financial realities were the issues in play.
Far better minds than what was stumbling around the DOT and DOJ at the time have had the temerity to point out that the debt from the deal would have been financial suicide. Now with Iran-spiked fuel costs, the Final Rites for the combined airline would have inevitably come sooner.
Brand Bungling? Also, there are some solid thinkers who have noted that the surviving brand might have been Spirit.
Brilliant. Please, say it ain’t so.
An airline industry first. Take JetBlue, with a reputation for customer service, and a solid product. Then replace it with the world renown Spirit product, with cheap contracted labor on the ground and cabin comfort on long flights somewhat similar to that of a Roman slave galley. That’ll have Scott Kirby desperately consulting his Ouija board for directions on how to deal with this. Or just tell the Fortune Gods thanks.
No, the Biden administration’s contention that the merger would have reduced competition was technically bogus. But unbeknownst to them, the decision stopped a deal that was an economic bow-wow – an airline merger that was financially doomed and economically non-competitive.
So, while it is politically trendy to blame Spirit’s shutdown on the last administration’s knee-jerk rejection of JetBlue acquiring Spirit, the argument is a complete non-sequitur.
Financially it would have gone splat in relatively short order, anyway.
