Once finalized, the JetBlue-Spirit Airlines merger may mean improved service for the ultra-low-cost carrier
It’s happened: JetBlue buys Spirit, merging a budget airline known for great perks (JetBlue) with an ultra-low-cost airline (Spirit) that’s often the butt of travel jokes. The $3.8 billion all-cash offer comes after Spirit and Frontier canceled their merger, making JetBlue Spirit Airlines the fifth-largest carrier in the country.
Peter Shankman is an entrepreneur who travels 300,000 miles each year—the moon is 250,000 miles away, which puts his frequent flying into perspective. “Spirit can’t get any worse,” he says, pointing out that Instagram accounts even highlight the airline’s drawbacks. “There’s nowhere to go but up.”
Spirit doesn’t offer complimentary food or beverage service, so travelers usually bring food on the plane, prompting countless memes. Besides the lack of snacks, there are serious downsides to budget airlines, such as dealing with a canceled flight, lost luggage or layovers that are too long or too short. The low-frills budget airline culture is real, though there are a few rules to follow when you fly that’ll give you the best chance of a hassle-free trip.
“There is a public out there for no-frills flying, and that accounts for the popularity of Spirit among certain circles of flyers, even amidst all the jokes about Spirit out there,” says Gabe Saglie, senior editor at Travelzoo. “These folks like easy-to-understand fare structures [even if it’s been a mostly nonrefundable reality for Spirit flyers] and access to cheap fares to small/regional airports that they visit often. The folks I know who love Spirit are simply enamored by the comparatively low cost to fly, even if it’s less glammy.”
Sometimes it’s not about luxury, amenities or the assurance your flight will arrive on time with your nerves intact. For some travelers, it’s just about getting from one point to another for the lowest cost. When saving money is the most important factor, you can pay attention to the best time to buy flights so you can secure a good deal on a top airline, or you can opt for a budget airline if you don’t care about things like pillows and blankets, free Wi-Fi or fees for carry-on bags that cost almost as much as the ticket itself.
Is JetBlue buying Spirit?
While the JetBlue-Spirit Airlines merger is official, it is not quite a done deal, and the airlines will operate under separate names for the time being, with the transaction expected to close in early 2023. The merger must undergo a rigorous antitrust review, and there may be regulatory pushback.
“Merger reviews are customary, but President Joe Biden has made intense scrutiny a priority in industries with heavy consolidation, including airlines,” Bloomberg reports. “The DOJ is likely to examine a range of factors in JetBlue’s case, including the markets in which the carriers both operate, how any concentration of flights would affect airfares, whether service would be cut and if the combination would reduce chances that the surviving carrier will expand into new cities or regions.”
What is JetBlue going to do with Spirit?
Officially, you’ll have to wait to see any changes to the airlines. “Nothing is changing right now—JetBlue and Spirit remain independent airlines,” JetBlue said in a press release about the merger. “After closing, we plan to integrate Spirit aircraft over time by retrofitting its existing fleet as JetBlue, introducing the JetBlue onboard experience to Spirit customers.”
Loyalty programs and co-branded credit cards will remain distinct until the deal closes. But once the merger is complete, you may see some upgrades to the usual Spirit flying experience.
What most frequent fliers are wondering, though, is whether Spirit will stay the bad airline travelers turn to only when they need a super-cheap fare. Will it get upgrades or airplane features to elevate it from everyone’s favorite aircraft joke to an airline people might actually enjoy flying? Saglie thinks so.
“The new JetBlue will offer Spirit flyers standard perks, like better seat pitch, better legroom and more in-flight frills, like snacks,” he says.
Shankman agrees that travelers will see a higher standard from Spirit after the merger. But that’s probably a bigger deal for vacationers than those headed out on a business trip. He and other business travelers rarely, if ever, fly budget airlines, he says. Whether he’s traveling for business or pleasure, he’s loyal to United Airlines.
“But you have to understand that people flying Spirit aren’t flying Spirit to have an amazing experience; they’re flying Spirit because they get to visit grandma for $47,” says Shankman. “And understanding that logic, it doesn’t need to improve that much. Even if Spirit only transfers their boarding process, that will greatly improve the Spirit flying experience.”
How will the merger affect travel?
We won’t know exactly how the merger affects travel until it’s a completely done deal, but the experts say there are two main areas where the new airline might impact travel: the availability and reliability of flights, and the cost.
Air travel has been an absolute mess this summer, with already busy airports overwhelmed by delays due primarily to staffing shortages. With delays and cancellations like we’ve seen this summer, mini vacations can be edited into oblivion when cut short by a day or two.
Increasingly, the weather is also a factor in travel woes. Flight-tracking site FlightAware reported a total of 7,746 delayed flights and 949 canceled flights across, into and out of the United States on Sunday, August 7. Saturday wasn’t much better, with FlightAware reporting that 41% of JetBlue’s flights and 36% of Southwest’s flights experienced delays. To put these numbers into perspective, both United and American Airlines had 4% of their flights canceled, with 23% and 24% of flights delayed, respectively. Delta canceled 2% of its flights that Saturday and delayed 22% of them.
The JetBlue-Spirit Airlines merger should offer a few improvements. “There will be a larger network of routes, including the Caribbean and Central America, not to mention JetBlue’s new service to London,” says Saglie. “And one can expect that the new JetBlue will have more planes and more crews to put into rotation, ideally minimizing things like delays that may be caused by a lack of planes or personnel.”
Added routes do seem to be on JetBlue’s agenda. “We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” JetBlue CEO Robin Hayes said in a statement.
In a press release, the company states that the new JetBlue Spirit Airlines will offer its combined 77 million customers more options and choices, including more than 1,700 daily flights to more than 125 destinations in 30 countries, based on December 2022 schedules.
With JetBlue Spirit Airlines bumping ahead of Alaska Airlines and becoming the fifth-largest airline in the country after American, Delta, United and Southwest, there will be reduced competition, which typically results in higher prices.
“Mergers in any industry mean big changes for customers, and that’s true in the travel industry as well,” says Larry Snider, vice president of operations for Casago vacation rentals. “Travelers who rely on these so-called budget airlines may have a harder time finding tickets within their preferred price range. But JetBlue representatives have said that keeping costs down is part of their goal for the merger.”
In fact, the company has hinted that the JetBlue Effect—what happens when legacy carriers react to JetBlue’s low prices—could trigger lower fares from all airlines and allow travelers more choices.
Of course, there’s no way to know for sure. As Snider points out, travelers will just have to wait and see how things shake out after the merger is finalized.
Have there been other airline merger deals?
In 2010, the New York Times reported that the 1978 deregulation of the airline industry ushered in mergers that are still happening today but that despite the consolidation, legacy airlines are losing money to budget carriers. We already know that the merger between Frontier and Spirit failed to go through, leading to the JetBlue-Spirit Airlines merger. Still, many mergers have been successful, such as those between American Airlines and TWA back in 2001, Delta and Northwest in 2008, United and Continental in 2010 and Alaska and Virgin America in 2016.
The airline business is a tough one, and mergers help airlines stay alive. Warren Buffett gave a speech to University of Georgia students in 2001, joking about the volatility of the industry. “I’ve got an 800 number I call now whenever I think about buying an airline stock,” he said. “I call them up at any hour, and then they talk me down. It takes hours sometimes, but it’s worth it, believe me. If you ever think about buying an airline stock, call me and I’ll give you the 800 number because you don’t want to do it.”
Because airline mergers help airlines stay alive, mergers also help customers. “The biggest winners are the people who happen to live near the hubs of the larger airline in the merger,” says Dartmouth engineering professor Vikrant Vaze, who has studied the impact of airline mergers on passengers. “For people who depend on the flight network of the smaller airline, however, there is huge uncertainty. It could go either way, and sometimes they lose big.”