JetBlue Airways made an offer Tuesday that no one in the airline industry saw coming, a bid to buy South Florida’s Spirit Airlines for $3.6 billion, potentially derailing Spirit’s merger with budget carrier rival Frontier Airlines.
The cash offer, on its face, looks much more enticing for Spirit executives and shareholders. But JetBlue may pose more challenges to blend with Spirit, an ultra-low-fare airline with a very different business model.
READER POLL: Tell us if you love or hate Spirit and JetBlue
“Integrating Spirit and Frontier will be easier, they’re similar airlines. They’re not clones, but they are siblings,” said Henry Harteveldt, a travel industry analyst at Atmosphere Research Group based in San Francisco, noting that the same private equity group, Indigo Partners, first owned a majority stake in Spirit, before selling its interest and going to Frontier.
“JetBlue acquiring Spirit will have a lot more pieces to the puzzle, I’d estimate it would take five years or more to put all those pieces together.”
While it’ll take a while to see if JetBlue or Frontier lands Spirit, frequent fliers now have one overriding question: what will this mean for them?
What are the differences in pricing?
Deep discount airlines like Spirit and Frontier have the cheapest base fares in the sky, setting the pricing floor for competitors with tickets on some routes starting in the $30 range. Although JetBlue is considered a lower cost carrier, it typically moves to match the budget carriers on certain routes it deems competitive but seldom drives fare prices even lower.
How do fees and amenities compare?
Spirit and Frontier are no-frills carriers that try to pack passengers tightly together and they charge extra for everything except using the toilets beyond the base fares for seats, including sitting in the planes where there’s more legroom, snacks and beverages — even water.
Also, passengers have to pay for carry-on luggage other than backpacks or purses that fit under seats. Those baggage fees increase depending when and where you pay them, such as online or at the airport. Tip: it’s cheapest to pay your bag fees when you buy your tickets online.
JetBlue also charges travelers who buy their lowest fares to pay for carry-ons that go in overhead bins. However, JetBlue offers more legroom and free amenities like free Wi-Fi, TV and brand-name snacks.
How big are these three airlines?
Either a Spirit- Frontier merger or JetBlue devouring Spirit would create the nation’s fifth-largest airline. Both deals would consolidate the market, but neither combination would come close to the size of the big four airlines in the United States: American Airlines, United, Delta and Southwest. Those four airlines account for over half the domestic market share of U.S. airlines. Frontier is only 3% of the domestic market share, Spirit is 5% and JetBlue is 5%.
How do the airlines’ positions compare at South Florida airports?
Spirit is the second-largest carrier at Miami International Airport, but it’s a distant second behind American Airlines. American flights represent 62% of total seat capacity and it has 140 different routes, while Spirit holds 5.5% of the Miami airport’s seat capacity, serving 28 routes, according to March data.
Frontier is the No. 6 airline there, with 3.3% of seat capacity and 26 routes, while JetBlue has only five routes out of Miami, for 1.8% of seat capacity.
Fort Lauderdale-Hollywood International Airport is a different story, however. According to February data, JetBlue and Spirit are the largest carriers, with JetBlue accounting for 27% of seat capacity and Spirit making up 22%. Delta and Southwest follow at 12% and 11%, respectively. Frontier only had 3% of the seat capacity. Before the pandemic began in March 2020, JetBlue was the top airline, with Southwest and Spirit trailing close behind.
What are their customer-service reputations?
Many travelers associate ultra-low-cost carriers like Spirit and Frontier with hellish travel experiences. Spirit, Frontier and JetBlue have one thing in common: unsatisfied customers. The U.S. Department of Transportation said that Spirit led the nation in consumer complaints in 2021, with JetBlue and Frontier following.
Where are the airlines prime geographic markets?
Spirit focuses on super cheap fares throughout the East Coast and to Central and South America and the Caribbean, where so many South Floridians are from and have family.
Frontier is based in Denver and has a similar business model, but focuses on budget flights to the West Coast. It makes a merger with Spirit seem like a natural business expansion move to create a national discount airline that flies coast to coast.
JetBlue is based in Queens, New York, and has an East Coast focus, with New York, Boston, Orlando and Fort Lauderdale being the airline’s most served destinations. Its routes have far more overlap with Spirit.
What’s at stake with Spirit’s South Florida physical presence?
Spirit employs 3,400 in the region and makes its corporate home in Miramar, after relocating from the company’s old headquarters in Detroit in 1999. In 2019, Spirit announced it would build a 500,000-square-foot corporate office in Dania Beach and move 1,000 workers there. When the pandemic emerged, Spirit narrowed the scope of the project.
Last September, the airline unveiled plans for a 180,200-square-foot headquarters. Spirit was still going ahead with the smaller new office when its merger agreement with Frontier was announced in February. But with Spirit likely to be absorbed by either Frontier or JetBlue, South Florida stands to lose a major airline headquarters, and the high-paying jobs that come with it. And maybe those recognizable bright yellow Spirit jets would be painted another hue.
©2022 Miami Herald. Visit miamiherald.com. Distributed by Tribune Content Agency, LLC.
