What the potential JetBlue and Spirit merger could mean for consumers
Spirit Airlines shareholders approved a takeover of JetBlue Airways on Wednesday, a merger that could create the fifth largest carrier in the U.S.
"This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant U.S. carriers," Ted Christie, president and CEO of Spirit Airlines, said in a press release. "We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to Team Members, Guests and stockholders."
While the $3.8 billion deal still faces regulatory approval, some experts say it could mean higher ticket prices for customers. A review from the federal government could take months if not years.
“I think it's bad news for travelers,” Scott Keyes, founder of Scott’s Cheap Flights, said in an interview with ABC News. “Competition between airlines is the single biggest determinant of how many cheap flights you see on any given route.”
Keyes said Spirit is an “anchor” in the market and its low fares tend to drive down ticket prices offered by mainline carriers.
“Your Delta fares, your American fares are actually cheaper if they're on a route where they're competing with Spirit, because they need to drop those fares to try to compete and get more customers,” Keyes said.
JetBlue’s CEO Robin Hayes said the acquisition could be a “solution to the lack of competition” in the U.S. airline industry, adding, “Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines.”
JetBlue shareholders are not required to vote on the proposed merger.
“[The Department of Justice] will try to model what will happen with one fewer airline. What will that do to route structure, to load factors, capacity and fares,” Ravi Sarathy, professor of International Business and Strategy at Northeastern University's D'Amore-McKim School of Business, told ABC News. “And they'll also try to model whether this will improve overall air quality and flight service quality.”
Sarathy said the merger could help improve JetBlue’s product. With the purchase, JetBlue would also gain Spirit’s Airbus fleet and its pilot staffing – both in high demand as airlines face an ongoing pilot shortage and delayed aircraft deliveries amid supply chain disruptions.
“The question will be, do Spirit passengers want better service, or are they really more concerned about the lowest possible cost of flying?” Sarathy said. “That remains to be seen.”
JetBlue offers lie-flat seats on some transcontinental routes and to London, while Spirit does not have a first/business class cabin. JetBlue also offers free, seatback in-flight entertainment and snacks; Spirit does not have inflight televisions or free food. It’s unclear how the two airlines would blend their products if a merger is approved.
ABC News' Sam Sweeney contributed to this report.
