Merger vote at Spirit could reshape discount airline market

FLE - A line of Spirit Airlines jets sit on the tarmac at the Orlando International Airport on May 20, 2020, in Orlando, Fla. Shareholders of Spirit Airlines will vote Thursday, June 29, 2022, on a proposed merger with Frontier Airlines, and the outcome could affect fares for millions of air travelers who depend on the budget airlines. –

The outcome could determine how many choices travelers have for the lowest fares. That's particularly important to leisure customers, the group that Spirit targets. Antitrust regulators are sure to examine either deal closely. Frontier and JetBlue both claim that consumers will benefit if they win the Spirit sweepstakes. A Frontier-Spirit combination would operate about 5% of the nation’s flights, and JetBlue plus Spirit would operate more than 7%, based on July schedules, making either one a stronger competitor to American, United, Delta and Southwest.

Keyes said removing a competitor always tends to push up fares, but the impact won't be as bad if the buyer is another budget airline like Frontier. Michael Linenberg, an airline analyst for Deutsche Bank, said if JetBlue succeeds in buying Spirit, some of the cheapest fares might go away, but a bigger JetBlue could replace them with seats that appeal to other kinds of travelers. He pointed to JetBlue's “Mint” business-class service, which has been so successful on transcontinental flights that it forced bigger rivals to cut prices on their premium seats.

Neither would-be buyer seems likely to improve Spirit’s poor record. Frontier had the worst complaint rate the other two years, and JetBlue’s rate last year was higher than everyone except Spirit and Frontier.

Source: News Formal (newsformal.com)

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