“The merger of the two airlines would place JetBlue as the most exciting national low-fare competitor against the four major US carriers, accelerating JetBlue’s growth,” JetBlue said in a statement. Spirit said it would “work with its financial and legal advisers to evaluate JetBlue’s proposal and follow the course of action that it considers to be in the best interests of Spirit and its shareholders.” For its part, Frontier defended its offer as the top deal for passengers and shareholders. “Combining Spirit and Frontier will save consumers $ 1 billion a year and offer even more extremely low fares nationwide, creating America’s most competitive ultra-low-cost airline,” Frontier said. the combination will offer “shareholders with significant upside potential for the combined company as a result of the merger synergies”. Both Spirit and Frontier operate as well-known in the industry extremely low cost carriers, with very low base fares and extra charges for everything else a passenger needs, including hand luggage. They depend much more on leisure travelers looking for opportunities and carry fewer business travelers than their larger rivals. As business travel has recovered from the pandemic much slower than leisure travel, Spirit and Frontier have recovered faster than their biggest rivals. Although passengers may like the low prices offered by Spirit and Frontier, they have generally given airlines low customer satisfaction scores. Spirit had by far the highest number of passenger complaints in 2021, with 11.5 complaints per 100,000 passengers, according to US Department of Transportation statistics. JetBlue had the second most complaints on this basis with 6.4, but decreased by 43% compared to the previous year. Frontier had the third most in the industry with 5.8. In 2020, Frontier had by far the worst complaints rate when it recorded 49.3 complaints per 100,000 customers. Frontier and Spirit also had the worst customer satisfaction scores in the industry for 2021, according to the US Customer Satisfaction Index, while JetBlue equals the third best score in this index. “Customers do not have to choose between a low fare and a great experience, and JetBlue has shown that it is possible to have both,” said Robin Hayes, CEO of JetBlue. The US aviation industry has been reshaping with mergers over the past 25 years. The four largest airlines today were created by a series of mergers between 10 airlines. If either JetBlue or Frontier end up in Spirit, it would be the first U.S. airline merger since Alaska Air bought Virgin America in 2016. However, the Biden government has taken a much tougher line on its implications. antitrust law of corporate mergers and the need to protect competition for the benefit of consumers. He has even filed a lawsuit to stop an alliance between JetBlue and American that allows airlines to make passenger bookings on each other’s flights, even though it is not a full merger. Frontier has played on this issue, saying that if only 18% of the routes operated by Frontier or Spirit are operated by both carriers, its agreement would be much better for the airlines’ competition. He argued that a JetBlue-Spirit combination would reduce competition and result in higher fares. “It’s surprising that JetBlue is considering such a merger right now, as the Department of Justice is currently suing to block their pending alliance with American Airlines,” Frontier said. Shares of JetBlue, Spirit (SAVE) and Frontier (FRNT) were all slightly lower in trading after the announcement.
