Source: Government Drops Talks To Allow JetBlue-Spirit Merger [Roundup]

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Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Wuhan isn’t a surprising destination, considering that Wuhan is larger than New York City by almost 4 million people. lol

  2. I don’t get the Jet Blue/Spirit merger? You are basically taking a high end product and merging it with the lowest of low end product? It’s like Ruth’s Chris merging with McDonalds?

    What am I missing?

  3. The Seeking Alpha article which is linked in the link you provided says that the DOJ is moving forward with the lawsuit to block the B6/NK merger. If B6 was talking in order to try to get the DOJ to back off, the DOJ never indicated that was something it was willing to do.

    And B6 has made one strategic mistake after another. Including prioritizing the merger over the NEA or even entering into the NEA.
    Its pulldown of EWR is just another indication that it can’t compete with the global carriers including DL at JFK or BOS. If B6 can’t compete in its largest two operations where it still carries more domestic passengers than DL, then they simply have a failing business plan – and no merger is going to save them.

    B6 started out strong but then quickly burned out. Not the first time it has happened esp. in the airline industry.

  4. If there are to be any mergers, NK & F9 and B6 & AS are the ones that make more sense. I would rather see new airlines startup. We need more competition.

  5. JetBlue probably made decisions based on the best available data it had. When did that become a crime?

    Tim Dunn has no way of knowing if JetBlue has made any mistakes. In my opinion (which is all I can claim) it’s just his opinion stated as a fact – for which he offers no sound evidence. Based on what he wrote above (and has written often in the past), it sounds like he wants JetBlue to be liquidated, just as he’s tended to hope regarding American and United over the years, based on how his writing comes off to me. I think it’s pretty sad when people want bad things to happen to others. Just my opinion – which I hope is (and has been) wrong.

  6. yes, Ghost, it is pretty obvious that a company has made strategic mistakes if they engaged in a transaction which the government decided was illegal, they didn’t expand at JFK or LGA when they could (both airports have had slot controls dropped during B6′ lifetime) and B6 by its own merits overschedules its operation so much that it cannot reach revenue parity with Delta on the exact same routes even in the same cabins.

    And that is before the DOJ weighed in and said it would still sue to block the merger despite the noise B6 continues to make to defend it.

    Feel free to tell us what you think the definition of a strategic mistake is but most people know exactly what one looks like

  7. @Tim Dunn

    DL is not a global carrier. I know you probably think it is. But it’s not. Delusions of grandeur really do abound in your mind don’t they? (At least, when it comes to all things Delta).

  8. Tim Dunn,

    Not appealing the NEA ruling is the strategy. Also The divestitures of slots and gates to allegiant and frontier is the strategy. It’s gonna be approved. Past precedent is playing strongly into JetBlues favor.

    Breeze, AVELO, northern pacific are all new ULCC’s that entered the market within the last few years. The void of spirit will allow those new ULCC’s to grow.

    JetBlue pilots and Spirit F/A’s have publicly backed the merger.

    The judge assigned to the case is a Reagan appointed judge and pro business. The DOJ is beginning to look very unreasonable. That’s not a great strategy.

  9. Good. I hate Spirit, don’t want them anywhere near Jetblue. Go back to merging with Frontier. Then we only have to compete with 1 gutter airline instead of 2.

  10. Boraxo

    There will only be 1 gutter airline…It’s not a merger, JetBlue is consuming Spirit, will gut and repaint their planes, install JB interiors, install Wi-Fi across the fleet, steal the pilots and valuable gate space, gain some mid continental focus cities and redeploy the fleet on routes that make sense with the higher cost structure.

  11. Dan77W – the gutting and seat capacity is why everyone on Twitter is saying the DOJ case is a slam dunk

  12. Jake S,
    your optimism is notable but the reasons you cited are not the reasons the DOJ gave for trying to block the merger.
    not a single person that I have read that says they believe the B6/NK merger have addressed the reasons which I have repeatedly raised and which the DOJ used as the basis for their objections. B6 is a low cost carrier, NK is a ULCC, and B6 said from the first word about the merger that its plan was to dismantle NK and take its assets in a model that will raise fares and reduce capacity on every flight, regardless of what B6 says it will do on a system level.

    feel free to tell us your definition of a global airline but given that AA, DL and UA all are in the top 10 global airlines by multiple metrics and DL’s international network and route system also fits that criteria, it is only by creating criteria which would cut most other global carriers out of the metric – including UA – that one could come to that conclusion.

    And it is funny that that some are worried about the comments on another site. In reality, that article asks the question about whether DL is a premium airline. It is most striking that the author of that article either doesn’t know how to define premium or does not do it in the article, particularly notable since he writes travel reviews all the time about experiences on the ground and in the air. My contribution is, as always, to bring logic and facts to a discussion that sorely needs it.
    But, yes, do go over there. He needs the page clicks. VFTW handedly kicked OMAAT’s backside in page click share over the past week. Gary at least used the DL Skymiles announcement to make some money. and he was much more accurate in what he said that some other bloggers.

  13. Tim Seriously you came off as having a few screws loose over or OMAAT, you ok today? Differences of opinions are just that….and we all know opinions are like a******* and everyone’s got one. Perhaps you should realize that and weigh people’s opinions accordingly as opposed to getting so frustrated, snarky, defensive and condescending feeling the need to counter each and every one of them. I believe Delta is a “Premium Airline”, but yet you’ll still attack me or get dismissive if I don’t agree with every facet of your usually very thorough analysis. You’ve been getting more substantive and measured and less emotional over the past few months so more and more are taking your opinions more credibly, but you do yourself a disservice when you act like you did yesterday! Do you self reflect on such things at all?

  14. The Sheraton closing is notable. A lot has been said about club lounges closing and amenities being cut back especially in full service upscale hotels, but one of the big drivers is that the business model isn’t really viable in a lot of these markets anymore. They were built for heavy corporate travel and not only is this down, corporate travelers are often steered toward select service properties through Concur policies and/or through per form limits.

    In fact, it was widely recognized during the 1990 recession that these types of units were overbuilt during tur 80s. Many of them were probably marginally profitable all along. I’d expect more to be closing in the coming years.

  15. Tim Dunn,

    I don’t believe the DOJ’s argument that an LCC can’t buy and dismantle a ULCC based solely on different business models is reasonable. The ULCC is a relatively new model in the USA and is being severely tested post pandemic, with profitability concerns. Spirit, changed its business model from LCC to ULCC in 2007. There is nothing preventing them from changing back to LCC. In fact Frontier is considering adding first class due to demand and profitability concerns. How an airline chooses to differentiate itself and choose its target consumer base is entirely out of governmental control. My question to you is if Spirit decides to changes its business model on its own and revert back to an LCC, will that be ok and will the DOJ approve the merger? I think, the answer is No, it will not. The DOJ has doesn’t want the merger and has found an argument (not a good one) to justify its position.

  16. Tim Dunn,

    JetBlue is going to raise fairs, BUT they will also cut out the junk fee add-ons. And make the seats more spacious, and provide free WiFi drinks and snacks. You’re conveniently leaving out an important part of the equation when you say they will “raise fairs”.

    A very large portion of Spirits revenue comes from the ancillary fees. Which is why their fairs are so low, but it doesn’t really tell the whole story. This is another reason the DOJ’s case is flawed.

  17. B6 and AS would be a problem. AS would dominate and they are absolutely hostile to Airbus, which is all JetBlue flies.

    Taking over Spirit makes more sense, as Spirit is also an all-Airbus airline.

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