JetBlue Airways is in clear selling mode of its proposed merger with Spirit Airlines as the U.S. Justice Department weighs the combination that would create the country’s fifth largest airline.
In a filing with the Department of Transportation Thursday, JetBlue said new service to Hawaii — a market neither JetBlue nor Spirit serves today — as well as at least eight other routes, would be possible if the $3.8 billion combination is approved by regulators. The potential new routes were mentioned by the New York-based carrier in a standard request to transfer Spirit’s international route authorities to JetBlue.
“With more flexibility, greater resources, and an expanded route network, the JetBlue/Spirit combination will be better positioned to take advantage of the now largely liberalized international operating environment and better utilize U.S. rights under applicable air transport agreements, thereby increasing service alternatives for consumers,” JetBlue said.
JetBlue and Spirit’s touting of their merger’s potential consumer benefits comes as the Biden Justice Department has taken a hard line on large business combinations. The antitrust regulator took American Airlines and JetBlue to court over their alliance in the northeast claiming it hurt consumers; a verdict in the case is expected anytime. And administration officials have repeatedly spoken out against further consolidation in already highly-consolidated industries.
American, Delta Air Lines, Southwest Airlines, and United Airlines — colloquially known as the Big Four — carried 79 percent of all U.S. domestic flyers during the year ending in October, the latest Bureau of Transportation Statistics data via Cirium show. JetBlue and Spirit carried 3.9 and 4.4 percent of travelers, respectively.
“This isn’t Pepsi and Coke merging,” JetBlue President and Chief Operating Officer Joanna Geraghty told Reuters on Wednesday.
Spirit CEO Ted Christie said Tuesday that he expects an initial decision from the Justice Department in the “next 30 days or so.”
On the growth opportunity for a combined JetBlue-Spirit, potential Hawaii flights would be possible with more facilities at Los Angeles International Airport, or LAX, JetBlue told the DOT. The carriers’ combined gates at the notoriously gate-tight airport would allow for better facility utilization, and the potential addition of flights to the islands popular with leisure travelers.
Alaska Airlines, American, Delta, Hawaiian Airlines, Southwest, and United currently serve the LAX-Hawaii market, Diio schedules show.
Another opportunity for JetBlue assuming it completes the merger is the expansion of its Fort Lauderdale base into a true connecting hub into the Caribbean and Latin America. This would challenge American’s existing hub down the road in Miami. Potential new routes include ones to Antigua, Belize City, Cincinnati, Liberia (Costa Rica), Memphis, Minneapolis-St. Paul, and Savannah, the filing states. Limits on international gates at the South Florida airport currently restrict the airline from offering many connections over Fort Lauderdale, where it instead focuses primarily on local traffic.
JetBlue also outlined 15 other international markets where connections would be competitive with existing flight options. These markets include multiple U.S. gateways, including Charlotte, Denver, Detroit, and San Francisco, to Caribbean and Latin American destinations like Guatemala City, Nassau, Quito, and San Pedro Sula.
All of the potential growth comes as JetBlue and Spirit separately face staffing and aircraft availability constraints on their 2023 growth. JetBlue has forecast 5.5-8.5 percent capacity growth over 2022 with executives saying most of that will come from restoring aircraft utilization, which limits the impact of further delivery delays at Airbus. And Spirit has cut its 2023 capacity outlook by up to 5 percentage points to up 19-22 percent year-over-year, due to maintenance issues with Pratt & Whitney geared-turbofan engines.
JetBlue and Spirit target closing their merger by the first half of 2024.
The story has been updated to reflect the 15 other international markets refer to connectivity, and not new nonstops.