As it awaits a ruling from the U.S. Justice Department, JetBlue has released a report highlighting the pro-competitive benefits of its pending merger with Spirit Airlines, which would form the nation’s fifth-largest carrier.
In an analysis revealed Monday, JetBlue said that data shows that it’s more than three times more effective at lowering legacy fares than Spirit and that the airlines have little overlap. The airline also claims that the merger will increase competition and that other ultra-low-cost carriers will continue to grow to assure increased competition and low fares.
“JetBlue’s unique combination of low fares and great service is a competitive force that keeps the legacy carriers on their toes and results in lower fares. This is the ‘JetBlue Effect,’ an outcome specifically cited by the U.S. Department of Justice,” the airline stated. “An economic analysis found that JetBlue is proven on average to be over 3x as effective at lowering legacy carrier nonstop fares than Spirit. With the scale unlocked by combining with Spirit, JetBlue will be able to bring down legacy carrier fares on more routes, benefitting more travelers than if JetBlue and Spirit continued as standalone airlines.”
Citing a third-party source published in April 2022, JetBlue also points out that it and Spirit only overlap on 11 percent or less of the nonstop routes on which both of them fly. Currently, both airlines primarily compete against the Big Four airlines—American, Delta, United and Southwest.
“To address potential concerns around the limited overlap between JetBlue and Spirit, JetBlue has already made unprecedented upfront commitments to divest all of Spirit’s holdings in Boston and New York, as well as five gates and related assets at Fort Lauderdale, to allow for allocation to other ultra-low-cost carriers (ULCCs),” the carrier confirmed. “These divestitures significantly reduce the already small number of nonstop overlap routes flown by JetBlue and Spirit.”
Ultimately, JetBlue believes the merger is a solution to the lack of competition currently faced by the Big Four carriers, which “have a lock on about 80 percent of the market.”
Data shows that a combined JetBlue and Spirit will have about 9 percent market share compared to about 16-24 percent for each of the four largest airlines.
“JetBlue’s combination with Spirit allows it to create a compelling national challenger to these dominant airlines, while also ensuring ULCC options remain available in overlap markets,” said JetBlue. “While JetBlue, with its highly unique combination of low fares and great service, will be able to expand with new national breadth as a result of the transaction, it will remain a significantly smaller player than each of the Big Four airlines.”
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