Judge blocks JetBlue from acquiring Spirit Airlines(nytimes.com)
nytimes.com
Judge blocks JetBlue from acquiring Spirit Airlines
https://www.nytimes.com/2024/01/16/business/jetblue-spirit-airlines-ruling-merger.html
120 comments
https://archive.is/MDYWF
I am personally happy with this decision. I don’t love flying spirit but I respect them, ever since hearing their former CEO speak on a Planet Money podcast.
He said straight up that Spirit Airlines is aiming to be the Dollar General of the skies. If you want something luxurious, go elsewhere. But he called out the other airlines who pretend like they are the Nordstrom of the skies, but don’t actually live up to that.
He said straight up that Spirit Airlines is aiming to be the Dollar General of the skies. If you want something luxurious, go elsewhere. But he called out the other airlines who pretend like they are the Nordstrom of the skies, but don’t actually live up to that.
Spirit also doesn’t live up to that in my experience. Their cost structure nickel and dimes the consumer so much that by the time you get to the destination you may have paid more for a much less comfortable trip.
At least in my anecdotal experience.
At least in my anecdotal experience.
> Their cost structure nickel and dimes the consumer so much that by the time you get to the destination you may have paid more for a much less comfortable trip
That lends more credence to the comparison against Dollar General and similar discount stores. Dollar stores generally charge a higher price relative to quantity, but they offer smaller quantities than big box stores which allows their customers to spend less (but also get a lot less). Wendover on YouTube did a video on this recently [0].
[0] https://www.youtube.com/watch?v=vQpUV--2Jao
That lends more credence to the comparison against Dollar General and similar discount stores. Dollar stores generally charge a higher price relative to quantity, but they offer smaller quantities than big box stores which allows their customers to spend less (but also get a lot less). Wendover on YouTube did a video on this recently [0].
[0] https://www.youtube.com/watch?v=vQpUV--2Jao
I've flown on Spirit twice, as a side effect of living in Miami.
The last time I did they canceled my flight overnight at 2:30am and forced me to rebook my ~$300 flight at twice the cost -- and it was leaving the same airport at the same time to the same destination.
And it was a miracle that I woke up to the email alert and was able to rebook my flight before it sold out anyway.
The last time I did they canceled my flight overnight at 2:30am and forced me to rebook my ~$300 flight at twice the cost -- and it was leaving the same airport at the same time to the same destination.
And it was a miracle that I woke up to the email alert and was able to rebook my flight before it sold out anyway.
And of course such a thing could have happen only with Spirit, right? Could not be any other airline. Like United would never cancel a flight without an ample notice and helpful customer success agents rebooking you trip hassle free.
Flights being cancelled? Sure, that happens to anyone operating mechanical equipment with required crews (and duty limits) and in variable weather.
I've never felt jerked around with any of the majors when it came to rebooking travel. They can't conjure up an empty seat that doesn't exist, but I've also never been required to pay a higher fare for them to take me on the itinerary that I originally booked.
Delta in particular I think is quite good at recovery from irregular ops (at least for their higher tier frequent fliers), but on the few instances with other carriers, I expect (and have received) decent and fee-free service when the airline cancelled a flight or missed a connection due to airline fault. I fully expect to have a crappy experience on Spirit whether or not they cancel the original flight.
I've never felt jerked around with any of the majors when it came to rebooking travel. They can't conjure up an empty seat that doesn't exist, but I've also never been required to pay a higher fare for them to take me on the itinerary that I originally booked.
Delta in particular I think is quite good at recovery from irregular ops (at least for their higher tier frequent fliers), but on the few instances with other carriers, I expect (and have received) decent and fee-free service when the airline cancelled a flight or missed a connection due to airline fault. I fully expect to have a crappy experience on Spirit whether or not they cancel the original flight.
I've had shitty experiences with other airlines but that one was unique/notable.
It does seem like post-Covid all of the airlines are racing to the bottom for quality.
I've had canceled flights before but no other airline has ever forced me to rebook effectively the same flight at double the rate and wait the 8-10 days for the refund on my original flight to my credit card. Back when I was a brokie (you know, Spirit's main customer base) that kind of shit would have been trip-ending.
It does seem like post-Covid all of the airlines are racing to the bottom for quality.
I've had canceled flights before but no other airline has ever forced me to rebook effectively the same flight at double the rate and wait the 8-10 days for the refund on my original flight to my credit card. Back when I was a brokie (you know, Spirit's main customer base) that kind of shit would have been trip-ending.
I've never run into any issues with United's support. A pretty similar situation happened to me, didn't cost me a dime.
Yes. But this is super transparent on their site. You can get super cheap flights if you don’t care about checking bags, in-flight sodas, and so on.
To add credence to that statement… LAX to LAS is a $20 flight one-way through spirit. It’s cheaper to fly a family of four than drive. It’s wild how cheap spirit becomes on certain routes, especially short hops where you can trivially get away with nothing extra
For Spirit, a carry-on is considered an extra. That's an extra $35 right there, which brings it pretty much inline with Southwest's pricing.
Just to add some data points, I’ve flown spirit many times (at least 20), have never paid any more than the base cost, and have never had any issues. Maybe it’s just that I go in with the expectation that I’ll receive no special service, but my overall experience has been fine.
Of course, I wouldn’t fly spirit if I had a complex flight itinerary or needed to be 100% sure I would arrive when expected. Then again, I’ve had more issues with other airlines (looking at you Alaska) as well, so go figure.
All that being said, the invisible variable most of us miss is plane maintenance. I don’t know what spirit’s record is in particular on this axis, but some airlines really skimp on maintenance costs, sometimes leading to entirely preventable disasters ([0] to name one of many)
[0] https://en.wikipedia.org/wiki/Alaska_Airlines_Flight_261
Of course, I wouldn’t fly spirit if I had a complex flight itinerary or needed to be 100% sure I would arrive when expected. Then again, I’ve had more issues with other airlines (looking at you Alaska) as well, so go figure.
All that being said, the invisible variable most of us miss is plane maintenance. I don’t know what spirit’s record is in particular on this axis, but some airlines really skimp on maintenance costs, sometimes leading to entirely preventable disasters ([0] to name one of many)
[0] https://en.wikipedia.org/wiki/Alaska_Airlines_Flight_261
Sounds exactly like a Dollar General or any "dollar store"
https://thehustle.co/the-economics-of-dollar-stores/
https://thehustle.co/the-economics-of-dollar-stores/
If you are a lite traveler .. fly with clothes in book bag then Spirit is the way to go and it's cheap. If you expect same experience you get from the others ..free checked luggage, refund or credit if you missed your flight, free peanuts and a soda, quick user interface / experience to book a flight, customer service rep to talk with and possibly free wifi you shouldn't bother with Spirit (spend more money for those things).
As a lite traveler Spirit fits my needs and I have more money in my pocket for my trip(s). As well I'm off the plane with my book bag and out of the airport quickly! I always get an aisle seat up front.
As a lite traveler Spirit fits my needs and I have more money in my pocket for my trip(s). As well I'm off the plane with my book bag and out of the airport quickly! I always get an aisle seat up front.
But without this deal they will go bankrupt and then there will be no Dollar General of the skies and the customer loses. Maybe allowing private markets to work would have been a good idea?
Can we even say that JetBlue succeeding and/or the merger moving forward would be a win for the consumer though?
The problem with aerospace is that it has a very high barrier to entry, so consolidation ends up hurting the consumer more often than not. Same as other infra related industries like telcos and civil engineering work that require fairly massive upfront capital and regulatory investments to operate.
Better to leave a hole in the market to encourage new entrants, even if it means consumers suffer in the short term.
The problem with aerospace is that it has a very high barrier to entry, so consolidation ends up hurting the consumer more often than not. Same as other infra related industries like telcos and civil engineering work that require fairly massive upfront capital and regulatory investments to operate.
Better to leave a hole in the market to encourage new entrants, even if it means consumers suffer in the short term.
I agree with you even though I think some will view this as a hot take. It is interesting that the US government has historically subsidized both smaller telcos and airlines to fill these types of small gaps where they exist.
Sounds like spirit is not a sustainable business and that is an issue unrelated to the merger. Unsustainable businesses fail, so let them fail
The purpose of blocking mergers is to promote competition, which is plainly not achieved if the acquisition target is not sustainable on its own.
It's utterly clear that free markets can fail and can eventually lead to all kinds of additional problems like wealth inequality and monopolies. This is clear.
Nobody is clear about the right move on how to deal with this problem. There's no sure fire conclusion.
Nobody is clear about the right move on how to deal with this problem. There's no sure fire conclusion.
Spirit runs with a 28 inch seat pitch, which is often physically shorter than the distance between someone's rear end and knee caps[1]. It's an unusual choice. Most other low cost carriers have 31 inches or more. I'm not sure Dollar General is the right comparison.
[1] Once you account for the padding, the angle you have to sit at, etc. Even if you aren't unusually tall, it is noticeably awkward and cramped.
[1] Once you account for the padding, the angle you have to sit at, etc. Even if you aren't unusually tall, it is noticeably awkward and cramped.
Considering reorganization under bankruptcy is not equivalent to going out of business.
There’s not a lot of room for effective restructuring here — for Spirit it’s more of a revenue problem rather than just a debt service problem. They’d probably end up in Chapter 7 (liquidation) pretty soon after starting Chapter 11 proceedings
[deleted]
While true, it is equivalent to shareholders in that they get wiped out.
I don't feel sorry for shareholders here. There are risks with all investments and its not as if Spirit mislead investors or acted fraudulently. Sometimes, investments go bad, thats the risk.
We shouldn't prioritize shareholders over the general health of a marketplace
We shouldn't prioritize shareholders over the general health of a marketplace
But it makes sense that with those alternatives shareholders would vote in favor of a buyout or a merger.
It should be noted that these were 2 small airlines trying to merge together with very little overlap & a willingness to divest more if the Government would work with them. The government refused to talk divestures & it seemed just wanted to block this deal to set a precedence. I do not think they care about Spirit's future or competition here.
Another important item from the trial - only 1/3 of Spirit customers pay the low fee without add-ons. The rest go for something more Jet Blue like anyways.
The precedence that the judge set here is more important than the actual merger. If any tiny subset of customers are harmed the deal cannot go through. I was really surprised to see this from a judge appointed by President Reagan. This could really crush M&As in America.
Another important item from the trial - only 1/3 of Spirit customers pay the low fee without add-ons. The rest go for something more Jet Blue like anyways.
The precedence that the judge set here is more important than the actual merger. If any tiny subset of customers are harmed the deal cannot go through. I was really surprised to see this from a judge appointed by President Reagan. This could really crush M&As in America.
> Rivals on average cut prices 7% to 11% when Spirit enters a market[1][2].
The same cannot be said for JetBlue
> “If JetBlue were permitted to gobble up Spirit — at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline,” Young wrote. “… Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier.”[2]
> This could really crush M&As in America.
That's a bit hyperbolic. If it does crush anti-competitive / anti-trust mergers, that's a win in any capitalist's book
[1] https://money.usnews.com/investing/news/articles/2024-01-16/... [2] https://www.washingtonpost.com/transportation/2024/01/16/jet...
The same cannot be said for JetBlue
> “If JetBlue were permitted to gobble up Spirit — at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline,” Young wrote. “… Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier.”[2]
> This could really crush M&As in America.
That's a bit hyperbolic. If it does crush anti-competitive / anti-trust mergers, that's a win in any capitalist's book
[1] https://money.usnews.com/investing/news/articles/2024-01-16/... [2] https://www.washingtonpost.com/transportation/2024/01/16/jet...
On the first 2 arguments - Spirit was able to be successful for a few years. That's no longer the case. They're not profitable. I believe this was stated by multiple airline CEO's publicly.
> That's a bit hyperbolic. If it does crush anti-competitive / anti-trust mergers, that's a win in any capitalist's book
The judge literally ruled here that a very small market (1/3 of customers on a small airline) would be harmed. JetBlue was also willing to discuss divestures & the government refused because they didn't care about competition or working with JetBlue. They have been doing weak cases for the past few years in hope to get any precedence set that makes M&A harder.
The judge uses the DOJ's expert witness's findings even after agreeing with JetBlue's team that the witness's model was completely broken.
This was a pro-competitive merger in my opinion because it created a stronger rival for the big 4, albeit still roughly half the size of most of them.
> That's a bit hyperbolic. If it does crush anti-competitive / anti-trust mergers, that's a win in any capitalist's book
The judge literally ruled here that a very small market (1/3 of customers on a small airline) would be harmed. JetBlue was also willing to discuss divestures & the government refused because they didn't care about competition or working with JetBlue. They have been doing weak cases for the past few years in hope to get any precedence set that makes M&A harder.
The judge uses the DOJ's expert witness's findings even after agreeing with JetBlue's team that the witness's model was completely broken.
This was a pro-competitive merger in my opinion because it created a stronger rival for the big 4, albeit still roughly half the size of most of them.
If the argument is 1/3 vs 2/3, seems pretty clear where the ruling would fall if those are the two options.
> ...the government refused because they didn't care about competition or working with JetBlue.
I take it this is your opinion based on your perception?
However from the U.S.News link I posted above
"The judge, who had questioned whether further asset divestitures could make the deal work, said, "The courthouse doors remain open, should the defendant airlines decide to try again."
You can also read the actual ruling [1] which states:
> _"Throughout June 2022, JetBlue made a series of revised offers to acquire Spirit, with increases in per-share price, increases in the reverse termination fee, and commitments to divestitures. Spirit continued to resist, citing continued concerns about the anticompetitive nature of such an acquisition. On June 6, 2022, Mr. Christie received an email from Mr. Hayes with an attached new, revised offer for Spirit Airlines. On June 27, 2022, JetBlue made a further amended offer to purchase Spirit; the Spirit Board did not view this amended offer as better and did not accept it. Instead, Spirit issued another press release on June 28, 2022, reaffirming its commitment to the transaction with Frontier and noting that the “[l]atest offer from JetBlue does nothing to address our Board’s serious concerns that a combination with [JetBlue] would not receive regulatory approval.”_
So even the Spirit board did not prefer this acquisition, even with the divestitures, but acquiesced to expected shareholder concerns on value maximization
[1]https://s3.documentcloud.org/documents/24362262/jetblue.pdf
> ...the government refused because they didn't care about competition or working with JetBlue.
I take it this is your opinion based on your perception?
However from the U.S.News link I posted above
"The judge, who had questioned whether further asset divestitures could make the deal work, said, "The courthouse doors remain open, should the defendant airlines decide to try again."
You can also read the actual ruling [1] which states:
> _"Throughout June 2022, JetBlue made a series of revised offers to acquire Spirit, with increases in per-share price, increases in the reverse termination fee, and commitments to divestitures. Spirit continued to resist, citing continued concerns about the anticompetitive nature of such an acquisition. On June 6, 2022, Mr. Christie received an email from Mr. Hayes with an attached new, revised offer for Spirit Airlines. On June 27, 2022, JetBlue made a further amended offer to purchase Spirit; the Spirit Board did not view this amended offer as better and did not accept it. Instead, Spirit issued another press release on June 28, 2022, reaffirming its commitment to the transaction with Frontier and noting that the “[l]atest offer from JetBlue does nothing to address our Board’s serious concerns that a combination with [JetBlue] would not receive regulatory approval.”_
So even the Spirit board did not prefer this acquisition, even with the divestitures, but acquiesced to expected shareholder concerns on value maximization
[1]https://s3.documentcloud.org/documents/24362262/jetblue.pdf
The judge asked the DOJ if there were any divestures that could be made that would make them think this deal should go through. They said no. I believe this was in the closing statements. JetBlue also tried to work with the DOJ before the trial & had no luck. JetBlue did divestures without anyone's requests to win over Spirit agreeing to this. The DOJ was never interested in them though.
In the end, Spirit should have stayed with their Frontier merger though the DOJ probably would have tried to block that as well.
Today Spirit is saying they will be looking at restructuring. Every analyst seems to be saying they are going to declare bankruptcy.
I have no idea how the DOJ or the Judge sees this as increasing competition, which I'm all for by the way. Even if Spirit doesn't go bankrupt they cannot compete as a low fare provider anymore. They will just slowly bleed for the next several years as they sell off and are unable to grow. Same with JetBlue now as well.
In the end, Spirit should have stayed with their Frontier merger though the DOJ probably would have tried to block that as well.
Today Spirit is saying they will be looking at restructuring. Every analyst seems to be saying they are going to declare bankruptcy.
I have no idea how the DOJ or the Judge sees this as increasing competition, which I'm all for by the way. Even if Spirit doesn't go bankrupt they cannot compete as a low fare provider anymore. They will just slowly bleed for the next several years as they sell off and are unable to grow. Same with JetBlue now as well.
They are the 6th and 7th largest airlines in the country. They are small only relative to the 4 largest.
The best argument I see for allowing the merger is that Spirit has been consistently losing money since the pandemic and may no longer have a viable business model. If they're destined for shutting down in the long run anyway, then you may as well let them attempt to merge, that'll probably lead to less of their market share winding up with the 4 biggest than them simply closing up shop will.
The best argument I see for allowing the merger is that Spirit has been consistently losing money since the pandemic and may no longer have a viable business model. If they're destined for shutting down in the long run anyway, then you may as well let them attempt to merge, that'll probably lead to less of their market share winding up with the 4 biggest than them simply closing up shop will.
> The Justice Department argued that smaller, low-cost airlines like Spirit helped reduce fares and that allowing the company to be acquired by JetBlue, which tends to charge higher prices than Spirit, would have hurt consumers.
In the new era, practices, perceptions and mission statements have to also be up to a standard, not just statistics. I wonder how long this could go on for.
In the new era, practices, perceptions and mission statements have to also be up to a standard, not just statistics. I wonder how long this could go on for.
> I was really surprised to see this from a judge appointed by President Reagan
Really? How old is he, 80? Why do Americans insist in having such geriatric leaders, they're starting to make Iran look normal...
Really? How old is he, 80? Why do Americans insist in having such geriatric leaders, they're starting to make Iran look normal...
Well then say goodbye Spirit. They are about to enter bankruptcy.
This is a bad ruling, Spirit is likely to go under without acquisition. Neither firm had particularly large share of market.
Besides that it's a bad ruling because the US spent years allowing mergers between large players that were clearly anti-competitive, and now in the environment of dominant airlines, it's applying the rules that it should have to the big players, but to smaller airlines who are now at a disadvantage due to their size.
It's an utterly feckless uneven application of the rules to everyone's detriment. You couldn't have designed a worse airline industry if you tried.
It's an utterly feckless uneven application of the rules to everyone's detriment. You couldn't have designed a worse airline industry if you tried.
Yes this is terrible. All it does is ensure Spirit will continue to be terrible until it goes under and prevent a major competitor from arising for the big 3 airlines. The doublespeak required to say that keeping Spirit as it is pushes air ticket prices down is baffling, unless we are to assume that the quality that you get with Spirit is in any way comparable to the large airlines (it's not). It's almost like saying we need to keep this bike company around so that it can drive car prices down.
1) The “quality” of spirit is just fine. They explicitly market themselves as a budget airline and that’s what you get. A lot of people just want the cheapest ticket to go from A to B and they provide it. Personally, I have enough disposable income to pay more for another airline, but sometimes the difference is so dramatic that I will take spirit. When I’m traveling with my two young kids, having a reclining seat and better flight attendants makes a marginal difference to an already difficult situation.
2) Their ticket prices are often a fraction of the others. Even if service quality is lower, I’d be surprised if it wasn’t pushing down overall prices.
2) Their ticket prices are often a fraction of the others. Even if service quality is lower, I’d be surprised if it wasn’t pushing down overall prices.
Don't make the mistake of assuming everyone requires the same level of quality as you do. Some people just want to go from A to B as cheap as possible. Want more quality? Pick a different option.
[deleted]
So it's a bad ruling because previous administrations didn't try to enforce anti monopoly laws?
Why not view it as, this is a good start and hoping it continues to prevent even more consolidation and monopoly in airlines and other industries? The notion that there has to be more consolidation to compete is only good for the companies monopolizing - not the consumer. Why should we be helping them make more profit by abusing market power versus delivering better products and competing?
Why not view it as, this is a good start and hoping it continues to prevent even more consolidation and monopoly in airlines and other industries? The notion that there has to be more consolidation to compete is only good for the companies monopolizing - not the consumer. Why should we be helping them make more profit by abusing market power versus delivering better products and competing?
Because the customer loses. They're sentencing Spirit to bankruptcy. OTher airlines will buy the planes and get stronger...
> So it's a bad ruling because previous administrations didn't try to enforce anti monopoly laws?
Alaska Airlines literally just bought Hawaiian. It hasn't even been two months.
Framing the block of an attempted merger between two airlines that combined are worth less than Alaska (which is itself far from an industry titan) as "anti-monopoly" is simply inane.
Alaska Airlines literally just bought Hawaiian. It hasn't even been two months.
Framing the block of an attempted merger between two airlines that combined are worth less than Alaska (which is itself far from an industry titan) as "anti-monopoly" is simply inane.
It's a good example of how judges are ultimately not that different from politicians.
It’s bad because the government is artificially manipulating market forces and prevents price discovery. Imagine you’re thinking of starting a small airline, like a Jetblue or Spirit, but investors know that if the business ever plans to exit through an acquisition, the government will intervene. Well, as an investor I’d be a lot less likely to invest.
As a result, you stifle the free market and prevent the emergence of competition. The knock on effect is less choice for the consumer and a less efficient market.
As a result, you stifle the free market and prevent the emergence of competition. The knock on effect is less choice for the consumer and a less efficient market.
This is not a bad thing. Businesses should plan to make a money themselves and not count on being acquired. I’d say that mindset is the source of a lot of our current economic woes
Yet you completely ignore the non competition in monopolistic markets? Markets aren't pure and price discovery is stifled in a lot of ways. Arguing consolidation will help make a fairer market is ignorant if not disingenuous.
Won't someone think of the poor investors? Again, that's not who public policy should serve.
Won't someone think of the poor investors? Again, that's not who public policy should serve.
Yes. The oligopoly already exists, so allowing players to fold by preventing their merger only entrenches the oligopoly further. Who do you think is pick up the excess demand when Spirit goes under? Who will acquire all their assets and employees? Hint: not a new market entrant.
This is the only thing that ever happens in my brain when I hear Spirit airlines now.
https://www.youtube.com/watch?v=HTkr2AxC2eI
https://www.youtube.com/watch?v=HTkr2AxC2eI
I'm about to board my first spirit flight after Southwest ruined my return flight
I'm sure it'll be fine. Uncomfortable, but fine.
That’s the Spirit!
Protip: if you pretend to be asleep after you request non-free water, the flight attendant will give up and give you the water for free
(Observed next to me on the one and only spirit flight I’ve been on)
(Observed next to me on the one and only spirit flight I’ve been on)
So its a good decision ... For the large airlines.
The issue I always saw with a Spirit / JetBlue merger is while JetBlue offers "low cost", Spirit occupies the "ultra low cost" niche, and a merger between the two would very likely mean the elimination of the "ultra low cost" segment to places Spirit operates. I feel like this is a great opening for Frontier to come back and try to buy them again, and some have said that deal would be approved, because Frontier operates in the same "ultra low cost" niche that Spirit operates in.
If this is true, then this is probably a great ruling for JetBlue; they can buy up the scraps at bankruptcy if Spirit liquidates.
Why would they have offered to buy them in the first place then?
They didn’t want to wait.
Frontier made an offer for Spirit.
This. As best I understand, JetBlue is interested in the airport slots that Spirit currently holds across the country, because those are pretty much entirely locked up. To become a major national airline (which seems to JetBlue's goal specifically), you need these slots.
I think the sticking point was city pairs served - significant overlap there
> Neither firm had particularly large share of market.
Yeah, exactly. Spirit competes with JetBlue on multiple routes which would otherwise be monopolized by the big three (American, United, Delta). This merger would have given JetBlue an almost total monopoly on the east cost low fare market. An unconditional win for the consumer.
Yeah, exactly. Spirit competes with JetBlue on multiple routes which would otherwise be monopolized by the big three (American, United, Delta). This merger would have given JetBlue an almost total monopoly on the east cost low fare market. An unconditional win for the consumer.
Sometimes I wonder if we should go back to the days of regulated airways. Yeah the cheapest ticket will be $500 but these things wouldn't be a problem anymore.
Bummer to read spirit might go under .. as a lite traveler ..stuff my clothes/belongings in a book bag ..spirit is very inexpensive and after ten or more good/fine flights in 2023 their my go to airline. None of my flights with them were any different than paying more to fly with the other more expensive airlines. My worst was a delta flight as they didn't clean the bathroom and it stink up the mid section of the plane and I paid double with delta vs. spirit.
Ironically I think Spirit’s big front seats are the best value in the sky in terms of price and comfort, and they’re usually available if you book early enough.
Yep, I have fiddled with my origin/destination cities just so I could take a Spirit flight with a Big Front Seat. The perks of a real domestic first class are nice, but the main thing you’re paying for is space to yourself. On Spirit, that space just costs a lot less.
> big front seats
Do you mean business class?
Do you mean business class?
Spirit literally calls them "big front seats".
https://customersupport.spirit.com/en-us/category/article/KA...
https://customersupport.spirit.com/en-us/category/article/KA...
The seats are about as big as domestic first class on other airlines, but you don’t get upgraded service (e.g. free meals/drinks).
There is no business class on Spirit.
Read the ruling and arguments on both sides here:
https://www.courtlistener.com/docket/66962142/united-states-...
https://www.courtlistener.com/docket/66962142/united-states-...
Meanwhile MSFT, a monopolist megacap, was allowed to buy Activision-Blizzard?
Yup, a firm monopoly on videogames if you ignore consoles [1], and PC (Steam, Epic) and mobile.
[1] https://www.ign.com/articles/ps5-has-outsold-xbox-series-x-a...
[1] https://www.ign.com/articles/ps5-has-outsold-xbox-series-x-a...
And titles from indie devs / smaller studios (which I find myself going back to play much more these days, than titles from the "big boys").
The FTC of US & CMA of UK made Microsoft spend a ton of money to get that acquisition & tried very hard to block it. A US judge in California ruled the FTC had a bad case.
Microsoft & Activision merging only moved them to the 3rd largest studio. Also it has plenty of pro competition factors allowing them to compete against Sony & Nintendo. They also made deals with many other distributors about expanding their game reach via cloud services. Lastly it allowed them to acquire King. Microsoft would like to break into mobile gaming more & there is a very monopolistic walled garden ala Google & Apple.
Go after Microsoft for their monopolist tactics but this wasn't one.
Microsoft & Activision merging only moved them to the 3rd largest studio. Also it has plenty of pro competition factors allowing them to compete against Sony & Nintendo. They also made deals with many other distributors about expanding their game reach via cloud services. Lastly it allowed them to acquire King. Microsoft would like to break into mobile gaming more & there is a very monopolistic walled garden ala Google & Apple.
Go after Microsoft for their monopolist tactics but this wasn't one.
The general principle of the current administration is that big is bad.
https://www.wsj.com/articles/unfortunately-big-is-bad-is-bac...
We have seen this with of the merger challenges that have happened since Biden took office. Trump also tried to block a few, mainly out of his own ego from what I could see. (AT&T-Time Warner Deal specifically).
https://www.wsj.com/articles/unfortunately-big-is-bad-is-bac...
We have seen this with of the merger challenges that have happened since Biden took office. Trump also tried to block a few, mainly out of his own ego from what I could see. (AT&T-Time Warner Deal specifically).
Better later than never, the Continental-United merger was an absolute disaster and should've never been allowed.
Great start to an interesting read... and then the end of a comment. /MildlyInfuriating.
Not sure what you would like to read. How Continental and especially Jeff Smisek took over United in a merger closely resembling McDonnel-Boeing, resulting in financial trouble, dysfunctional computer systems, dissatisfied consumers having significantly less choice? (Eventually Smisek got fired and only the corrupt US legal system kept him from criminal charges and out of prison.) All this is well known and I didn't feel like typing up 10+ years of sad history.
As someone who basically flys exclusively JetBlue when I have the choice, I am disappointed by this.
JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines.
I don't understand how this is bad for competition when we desperately need more competition that can actually compete.
JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines.
I don't understand how this is bad for competition when we desperately need more competition that can actually compete.
Don't be. This merger being blocked means JetBlue now won't acquire Spirit at an inflated valuation. Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes. So your favourite airline will likely get everything it wants (seems like they were willing to pay more than Frontier anyway) with nothing it doesn't. The only downside is they have to wait for bankruptcy proceedings which are about 4-6 quarters away looking at Spirits run-rate and revenue projections.
However you should be sad in general because this is a terrible judgement that dooms a business from taking the only way out that would have been a reasonable outcome for its employees, shareholders and users.
However you should be sad in general because this is a terrible judgement that dooms a business from taking the only way out that would have been a reasonable outcome for its employees, shareholders and users.
> Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes
I'm not familiar with how the process works, would JetBlue now have to compete with larger airlines for these assets if Spirit goes under?
I'm not familiar with how the process works, would JetBlue now have to compete with larger airlines for these assets if Spirit goes under?
Yes but this is likely still better than acquiring Spirits considerable debt load etc. The most likely competitor will actually be Frontier who also made an offer on Spirit. The big players generally have the allocations they are after already, hence their position in the market being so solid.
There is a risk of the big 4 just buying the slots to tie them up though, this happens a lot in markets like Australia which have very strict arrival/departure windows but is a lesser problem in markets like the US which throttle throughput based on ATC capacity instead.
There is a risk of the big 4 just buying the slots to tie them up though, this happens a lot in markets like Australia which have very strict arrival/departure windows but is a lesser problem in markets like the US which throttle throughput based on ATC capacity instead.
We had 14 regional / internal to the US airlines in the 80's. We had 10 airlines in the '00's. We have basically 4 or 6 national / regional airlines now.
"JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines."
That is like 'Their political party is cheating, we need to cheat bigger to win". That is leaning in to making the situation more and more rigged, more and more of a failed market / system.
I will leave it as an exercise to the reader to go read about how less players in a market bad for competition. Matt Stoller is a good place to start.
JetBlue can bid for slots at an airport, like anyone else. If bigger airlines are blocking them, lets fix that market to be competitive, NOT "let's help the market degrade into Oligopoly faster".
"JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines."
That is like 'Their political party is cheating, we need to cheat bigger to win". That is leaning in to making the situation more and more rigged, more and more of a failed market / system.
I will leave it as an exercise to the reader to go read about how less players in a market bad for competition. Matt Stoller is a good place to start.
JetBlue can bid for slots at an airport, like anyone else. If bigger airlines are blocking them, lets fix that market to be competitive, NOT "let's help the market degrade into Oligopoly faster".
The market has already degraded into oligopoly. Spirit and/or JetBlue folding will only make that worse.
This seems to be a common theme in politics. A bad decision was made by the previous generation. Now the current generation, seeing that the decision was bad, makes decisions that should have been made in the first place. The problem now is that the bad decisions have already been made, and what at one point would've been a good decision is now either exacerbating the problems caused by the bad decisions or is at best failing to remedy them.
It comes up a lot in healthcare and immigration for example. What constitutes good policy is highly conditional on the current state of the world.
This seems to be a common theme in politics. A bad decision was made by the previous generation. Now the current generation, seeing that the decision was bad, makes decisions that should have been made in the first place. The problem now is that the bad decisions have already been made, and what at one point would've been a good decision is now either exacerbating the problems caused by the bad decisions or is at best failing to remedy them.
It comes up a lot in healthcare and immigration for example. What constitutes good policy is highly conditional on the current state of the world.
What were the reasons for that consolidation? Was it just simply that a small airline is not economically viable or is it a push for larger airlines?
Considering the talk around Spirit being on the verge of bankruptcy it seems like it may be a mix of the 2 and the first one being an important part of this conversation.
just saying lets fix the market while ignoring that there is a problem with the market with a potential thing to address part of it right in front of us is just passing on the problem until we have the perfect solution.
That perfect solution may not be viable or may be many years away for a variety of problems (not the least of which being just a space problem at airports).
We have a bad tendency to try to get the perfect solution to a problem which stops us from having anything.
Considering the talk around Spirit being on the verge of bankruptcy it seems like it may be a mix of the 2 and the first one being an important part of this conversation.
just saying lets fix the market while ignoring that there is a problem with the market with a potential thing to address part of it right in front of us is just passing on the problem until we have the perfect solution.
That perfect solution may not be viable or may be many years away for a variety of problems (not the least of which being just a space problem at airports).
We have a bad tendency to try to get the perfect solution to a problem which stops us from having anything.
If Alaska acquires Hawaiian then this would have to be decided ultimately by SCOTUS right? I would think these two cases are too similar and there needs to be some fairness and consistency in the rulings.
I'm probably oversimplifying, but Alaska + Hawaiian creates a larger regional competitor to e.g American, United, and Southwest on a more local scale where most of their routes are complimentary (the two weren't substantially competing; Alaska offers a handful of CONUS to Hawaii routes, whereas Hawaiian offers CONUS as well as international routes to/from Hawaii), whereas JetBlue acquiring Spirit consolidates nationwide low-cost carriers and reduces low-cost competition
On a side note, I find it interesting that JetBlue is considered "low cost" but has the absolute best domestic business class by a long shot.
I've always considered JetBlue to be a value leader vs. low cost leader. They have nicer seats, in seat entertainment in all classes and have a pricing/refund/exchange policy that is more customer friendly than competitors. Spirit is just going for low cost. Southwest is in between where they want low cost but you have to fight for a seat and might needs to have 2 or 3 stops to cross the country depending on where you start.
I assume you're talking about JetBlue's Mint product which is all business class for some cross country flights and a few international. Again, I think they are trying to provide the best value for business class compared to the larger carriers.
I assume you're talking about JetBlue's Mint product which is all business class for some cross country flights and a few international. Again, I think they are trying to provide the best value for business class compared to the larger carriers.
They also have free wifi, which even Southwest still doesn't offer.
The problem is that Spirit is but going to survive 2024. Between their debt situation and a number of their A320 Neos about to be grounded thanks to a Pratt and Whitney eff-up, they won't be around long enough to keep anything competitive.
If this is the case, then an acquisition to prevent a competitor from going bankrupt should generally not be anti-competitive? Since, they would no longer be your competition anyways?
It could be seen as pro consumer, but it also could be seen as anti competitive. Spirit going under would open up space for a new competitor to potentially move in.
An analogy would be two competing gas stations at a very busy intersection with no plots nearby to build more stations. Just by existing they either drive each other down on price or collude on it. One going under means a new station could exist, but one buying the other guarantees prices do not go down.
An analogy would be two competing gas stations at a very busy intersection with no plots nearby to build more stations. Just by existing they either drive each other down on price or collude on it. One going under means a new station could exist, but one buying the other guarantees prices do not go down.
If that's the case, why does JetBlue want to acquire them now? Why not wait until they file for bankruptcy protection, and likely get a much better deal?
They'll have to compete with others on all the individual bits that way. No one else wants all of Spirit, but given the opportunity to pick and choose, some aircraft and landing slots are likely to be competed for.
And their share price has just tanked ~50%. Maybe that was the plan all along...
I’m honestly surprised at how small the breakup fee was compared with Adobe/Figma. I guess the difference of negotiating from a position of strength vs weakness.
It would probably still have an effect of raising prices for flights to/from Hawaii no?
Possibly, but it's not as abrupt and obvious as with JetBlue/Spirit, who both compete in the exact same market in modestly different ways. Alaska and Hawaiian have limited regional overlap with flights from certain west coast cities to certain islands, but beyond that, Alaska would be getting Hawaii's entire international route network and tying it in with their entire CONUS domestic route network.
The more interesting transaction that arguably should've been stopped was Alaska purchasing Virgin America as they were both largely west coast airlines. But amazingly enough (as someone who held status on VA and later Alaska), my flights actually got cheaper after that merger, and I was consistently upgraded too. So if that merger hadn't happened, my experience would've been worse.
The more interesting transaction that arguably should've been stopped was Alaska purchasing Virgin America as they were both largely west coast airlines. But amazingly enough (as someone who held status on VA and later Alaska), my flights actually got cheaper after that merger, and I was consistently upgraded too. So if that merger hadn't happened, my experience would've been worse.
That's easy enough to address with selling off Hawaii slots.
To put this in perspective, 60 out of 566 JetBlue and Spirit routes overlap. Alaska and Hawaiian share 12 routes out of 336.
To put this in perspective, 60 out of 566 JetBlue and Spirit routes overlap. Alaska and Hawaiian share 12 routes out of 336.
No — the Supreme Court will often review circuit splits in law, but these are splits in facts
[dupe]
Some more discussion: https://news.ycombinator.com/item?id=39019876
Some more discussion: https://news.ycombinator.com/item?id=39019876