JetBlue Tried, But Spirit Said It Wants Frontier: How Will Fliers Fare?
- Spirit Airlines rejected an offer from JetBlue clearing the way for a merger with Frontier.
- It’s doubtful Spirit and Frontier will give up their ultra-low-cost niche.
- JetBlue could still appeal directly to Spirit shareholders.
Now that Spirit Airlines has rejected a bid by JetBlue, its ultra-low-cost rival Frontier is once again the prime contender to merge with the Florida-based carrier.
But if the two budget airlines join forces, how will fliers fare?
“If Spirit and Frontier go forward with the merger and its approved by the Department of Justice we will have a true coast to coast budget airline that will compete not only in smaller cities but importantly in many larger markets,” says veteran travel industry analyst and consultant Henry Harteveldt of Atmosphere Research Group.
For now, it will be business as usual for Spirit and Frontier, with each airline’s board needing to agree to go forward and the Department of Justice has to approve the deal.
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“We won’t really know the shape of a combined Spirit/Frontier–what products it will keep, what products will it add, what routes it will fly – until the DOJ issues its final ruling,” Harteveldt says. “So for the immediate future … they will operate independently. They will continue to compete against one another. They’ll do their own promotions. They won’t be combining their frequent flier programs or anything like that.”
But for passengers, questions remain. Would the newly combined carrier follow Spirit’s lead, implementing WiFi for passengers, or Frontier’s decision to not offer it? Will the airline keep Spirit’s signature yellow planes, or choose Frontier’s pictures of animals splashed across the fleet’s tailfins as its logo?
Will fares go up?
Two budget carriers joining forces could mean higher fares for passengers. But John Cox, a retired U.S. Airways captain, says it’s doubtful Spirit and Frontier will give up their ultra-low-cost niche.
“That’s a business model that they’ve had from the beginning,” he says. “I don’t see that changing.”
Harteveldt adds that “without the two airlines competing head to head as independent carriers, there’s no question some degree of price competition would go away.”
But their biggest ultra-low-cost rival, Allegiant, remains in the marketplace along with other budget carriers like Avelo, Sun Country and Breeze.
“Breeze, in particular, has a fairly substantial number of new airplanes that are scheduled for delivery in the next five years,” says Harteveldt “so we’ll just have to really see if those airlines will be large enough to help keep prices down.”
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There could be more places to fly
A merger of Spirit and Frontier would create the fifth-largest U.S. carrier based on seat capacity, and the seventh-largest based on revenue.
The airlines’ executives have previously said their combined carrier would not only keep low-cost tickets in place but that they’ll be available on far more flights with the two carriers already identifying more than 300 new routes they can fly by blending their networks.
Eugene, Oregon, and Worcester, Massachusetts, are potential new destinations, Spirit and Frontier executives said, and they may also resume service to Washington Dulles Airport and Jackson, Mississippi.
“I would anticipate that with the hundreds of new airplanes the two airlines have on order, not only would they grow their domestic route network, but I would expect them to expand into Canada and potentially across the North Atlantic to Europe,” Harteveldt says.
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Will Spirit’s culture win out, or Frontier’s?
Every airline offers its own experience, and passengers often have a preference.
“Each airline in the country, whether ultra low cost or traditional has its own culture … the way that they interact with the passengers and the way they conduct business,” Cox says. “But they’ll have to realistically set a new post-merger culture.”
Still, the contrast between the largely no-frills carriers may be limited.
Frontier Airlines acquires Spirit. Two wrongs don’t make a right.— Mark Whicker (@MWhicker03) February 7, 2022
“Frontier Airlines acquires Spirit. Two wrongs don’t make a right,” tweeted Mark Whicker @MWhicker03 on Feb. 7.
“I don’t know that anyone will shed a tear if Spirit disappears,” Harteveldt says. “Frontier has a slightly cuddlier image because of the various animals that are painted on the tailfins of the planes but it’s not like Frontier is Pan Am. It’s not an airline that is known for taking good care of its customers or that has been romanticized in movies and books or popular culture.”
Still, “what do they borrow, what products do they keep,” will depend on which carrier’s culture is the surviving, dominant brand, he says.
And at least one potential passenger, referring to a tweet about Frontier was hopeful about the choices a merger with Spirit could bring.
“Looks like they will merge with spirit,” wrote @ckurtzopks81. “Hope they can form a decent airline and new competitor.”
Spirit has WiFi. Frontier doesn’t. Will the merged airline offer it?
Spirit has installed Wi-Fi on more than half of its fleet, but Frontier doesn’t offer it, saying that helps keep costs down for its passengers.
“Going forward, the merged carrier can only have one WiFi policy,” Cox says. “There’s a slightly higher likelihood they’ll go ahead and bring WiFi into Frontier’s airplanes. It’s expensive to add but in our society, it’s become sort of a mainstay and expectation.”
Would JetBlue be a better deal?
JetBlue may not be out of the running yet, Harteveldt says, adding that the carrier may appeal directly to some Spirit shareholders to get them to press the airline’s board to reconsider its offer.
JetBlue has said that it competes directly with Spirit on fewer routes than Frontier, and that other major U.S. airlines are more likely to match JetBlue’s lowest fares than they are the prices charged by budget carriers like Spirit and Frontier. Harteveldt says that the Department of Justice might find those arguments compelling.
“If the DOJ believes or accepts … a combined JetBlue/Spirit would actually have more impact on lowering fares on more routes that serve more travelers, that could sway the DOJ in favor of a JetBlue Spirit merger,” he says.
And fliers could win out if JetBlue brings its popular customer experience to its new ultra low fare partner.
“Certainly JetBlue has a lot more creature comforts,” Harteveldt says, noting that the airline offers more generous legroom, a premium cabinet option for longer flights, and free snacks, coffee and soft drinks.
A combined JetBlue/Spirit airline would also have roughly 10% of the industry’s capacity, which might lead the new carrier to buy larger planes and fly new routes from the U.S. into Europe, South America or Asia.
“There are things I see happening with a potential JetBlue/Spirit merger that could be very compelling,” Harteveldt says.
But in a letter to JetBlue’s CEO, Spirit’s Chairman of the Board Mac Gardner and CEO Edward M. Christie, III said that a potential merger was unlikely to be approved by Justice Department officials because of JetBlue’s Northeast Alliance with American Airlines, which Spirit says is anti-competitive.
Harteveldt agreed that the alliance is a potential roadblock, even though JetBlue told Spirit it would be willing to give up take-off and landing slots and other assets to make both relationships work. “We’ll have to see if that’s enough,” he says. “Clearly that wasn’t enough to sway the Spirit board.”
Ultimately, Cox says, there are always bumps in the passenger experience as two airlines becomes one, but the snarls will eventually be ironed out.
“It will have its successes and its challenge as it goes forward,” he says of a potential Spirit and Frontier merger. “But in the end, five years from now, it will be a combined carrier and functioning well. That’s what history has shown us.”
Contributing: Dawn Gilbertson, USA TODAY