JetBlue and Spirit confident that the proposed
merger is procompetitive
Settlement agreement with Florida resolves
state’s concerns and offers model on how government can ensure new
jobs and additional flights
JetBlue Airways Corporation (“JetBlue”) (NASDAQ: JBLU) and
Spirit Airlines, Inc. (“Spirit”) (NYSE: SAVE) today responded to
the filing of a complaint by the U.S. Department of Justice (the
“DOJ”) seeking to block the companies’ merger:
JetBlue and Spirit will continue to advance our plan to create a
compelling national challenger to the Big Four airlines, which
control about 80% of the market after years of industry
consolidation that the DOJ itself approved. By coming together, we
will expand JetBlue’s unique offering – where customers do not have
to choose between a low fare and a great experience – to boost
competition nationally.
JetBlue has proven its ability to force the legacy carriers to
react to JetBlue’s low fares and award-winning service. The DOJ
itself said that “In the face of consolidation, JetBlue has
provided an important and steadfast source of competition” and that
“JetBlue’s reputation for lowering fares is so well known in the
airline industry that it has earned a name: the ‘JetBlue Effect.’”
(a).
JetBlue CEO Robin Hayes said: “Customers deserve a
competitive airline marketplace and we will pursue this merger to
ensure they get it, continuing to disrupt the legacy airlines with
low fares and award-winning service that even the DOJ has
applauded. We believe the DOJ has got it wrong on the law here and
misses the point that this merger will create a national low-fare,
high-quality competitor to the Big Four carriers which – thanks to
their own DOJ-approved mergers – control about 80% of the U.S.
market. There is too much at stake for the DOJ to prevent us from
bringing the JetBlue difference to more customers in more
markets.”
Spirit CEO Ted Christie said: “We disagree with the DOJ’s
decision to seek to block the proposed merger, which will benefit
consumers and employees. We will vigorously defend our position
that a combined JetBlue and Spirit will be a game changer for
customers nationwide, creating the most compelling national
low-fare challenger to the dominant U.S. carriers. Together, we
intend to democratize flying for travelers across the country – a
goal we believe is worthy of the government’s support.”
ULCC Market Will Continue to Thrive as JetBlue Brings
Much-Loved, Award-Winning Experience to Spirit Aircraft
Customers will win with both more JetBlue service and continued
ultra-low-cost carrier (ULCC) expansion. JetBlue competes for all
customers, and its Blue Basic fare offers customers a competitive,
low-price option to save more money. In addition, because many
Spirit aircraft will continue to fly in their current configuration
during the retrofitting process after the transaction closes, there
will be no short-term change in capacity.
As JetBlue retrofits Spirit’s aircraft with its leading
customer-focused experience (e.g., adding more leg room and other
onboard amenities), the combined airline will also be able to
meaningfully increase aircraft utilization, offsetting seats
removed in the retrofitting process by adding more flights. This
will result in more seats with Blue Basic fares, and coupled with
the rapid growth of the ULCCs, will create a more competitive
environment and ongoing access for the most price-sensitive
customers.
Hayes continued: “Putting the JetBlue’s increased legroom and
free amenities on Spirit aircraft is a big win for consumers, and
we can offset any loss of seats with increased flying and through
ULCC growth. You shouldn’t have to choose between a low fare and a
great experience, so the government should celebrate an expansion
of JetBlue’s low fares and customer favorites like the most legroom
in coach, free Wi-Fi, live seatback TV, and free snacks coming to
Spirit’s fleet.”
Settlement Resolves Concerns About Florida; Ensures New Jobs
and Additional Flights
We are extremely pleased to secure a settlement with the State
of Florida supporting the merger between JetBlue and Spirit. The
agreement ensures that the merger will deliver new jobs in Florida
as JetBlue adds its low-fare flights in airports across the
state.
- The combined JetBlue and Spirit will increase seat capacity by
at least 50% in both Fort Lauderdale and Orlando and will increase
its aggregate seat capacity at all other Florida airports in which
JetBlue or Spirit currently operate by at least 50%.
- These commitments will bring hundreds of new daily flights to
Florida, additional frequencies in over 35 markets, and service to
nearly 50 new routes that are not currently served by either
JetBlue or Spirit.
- JetBlue will bring at least 1,000 new jobs to South Florida, at
least 500 new jobs to the Orlando region, and at least 500 new jobs
to support JetBlue’s expanded operations at airports throughout
Florida.
- JetBlue will extend its “no furlough” policy and provide
increased compensation to Spirit Team Members.
- JetBlue will maintain all Florida facilities currently in use
by either JetBlue or Spirit, including Spirit’s planned future
headquarters in Dania Beach, at their current or planned employment
levels or greater for at least five years following the
merger.
Hayes said: “We’re appreciative of Florida State Attorney
General Moody’s willingness to recognize the opportunity for
consumers and negotiate a fair settlement. It’s unfortunate the
federal government and other states want to block the benefits of
this merger, including significant job growth and the increased
number of affordable flights that this combination unlocks.”
In fact, all JetBlue crewmembers and Spirit Team Members
will benefit from a larger, more competitive airline:
- Once combined, the airline will have more aircraft, a bigger
network, more jobs, and more opportunities.
- JetBlue has committed to strong protections for crewmembers and
Team Members, including extending its 23-year no furlough
commitment, committing to no displacements, and providing
assurances around seniority protection.
- By combining airlines, crewmembers and Team Members will have
the opportunity to open the collective bargaining agreements and
discuss topics important to them, including pay scales and
benefits. JetBlue is incentivized to complete this process as fast
as possible so the airline can receive a single operating
certificate and begin functioning as one airline.
JetBlue-Spirit Merger Benefits Are Clear and Have Wide
Support
The benefits of a JetBlue and Spirit combination have been
widely recognized by consumer advocates, labor leaders,
legislators, local government officials, industry experts, and
academics. In addition, thousands of JetBlue crewmembers and Spirit
Team Members have submitted letters of support to the DOJ and the
U.S. Department of Transportation. We are confident a court, too,
will recognize the merits of our case.
The rationale for a JetBlue-Spirit combination is clear:
- JetBlue is 3x more effective than Spirit at bringing down
competitor fares. JetBlue’s unique combination of low fares and
great service is a competitive force that keeps the legacy carriers
on their toes and results in lower fares.
- JetBlue’s award-winning customer experience will reach more
customers. JetBlue is loved by customers for its award-winning
onboard service, featuring the most legroom in coach (b); free and
fast Fly-Fi broadband internet (c); complimentary and unlimited
name-brand snacks and soft drinks; and free, live DIRECTV®
programming at every seat.
- The combination will unlock long-term opportunities to add
more destinations and routes that otherwise would not be
possible. This new flying will bring increased choices, and
low-fare competition to more cities and in legacy carrier
hubs.
- JetBlue and Spirit together will still be much smaller than
any Big Four carrier. Even as the fifth-largest carrier, a
combined JetBlue and Spirit will have only 9% market share,
compared to 16-24% for each of the four largest airlines.
- JetBlue and Spirit primarily compete with other carriers not
each other. According to a third-party source published in
April 2022 and reaffirmed with more recent data, JetBlue and Spirit
only overlap on 11% or less of the nonstop routes on which both of
them fly.
- JetBlue has offered unprecedented upfront divestures to
ensure ULCC growth. To address potential concerns around the
limited overlap between JetBlue and Spirit, JetBlue has already
made upfront commitments to divest all of Spirit’s holdings in
Boston and New York, as well as five gates and related assets in
Fort Lauderdale, which significantly reduces the already small
number of nonstop overlap routes.
- JetBlue will expand sustainability leadership. JetBlue
expects to extend its industry-leading climate commitments to the
combined airline, including its target to achieve net zero carbon
emissions by 2040, which is ten years ahead of the broader U.S.
airline industry’s goal. As part of these efforts, JetBlue will
leverage the combined company’s order book to accelerate the fleet
transition to next generation, fuel-efficient aircraft and
introduce regular use of sustainable aviation fuel into Spirit’s
West Coast operations after closing.
About JetBlue
JetBlue is New York's Hometown Airline®, and a leading carrier
in Boston, Fort Lauderdale-Hollywood, Los Angeles, Orlando, and San
Juan. JetBlue carries customers to more than 100 cities throughout
the United States, Latin America, Caribbean, Canada, and United
Kingdom. For more information and the best fares, visit
jetblue.com.
About Spirit
Spirit Airlines (NYSE: SAVE) is committed to delivering the best
value in the sky. We are the leader in providing customizable
travel options starting with an unbundled fare. This allows our
Guests to pay only for the options they choose — like bags, seat
assignments, refreshments and Wi-Fi — something we call À La
Smarte®. Our Fit Fleet® is one of the youngest and most
fuel-efficient in the United States. We serve destinations
throughout the U.S., Latin America and the Caribbean, making it
possible for our Guests to venture further and discover more than
ever before. We are committed to inspiring positive change in the
communities where we live and work through the Spirit Charitable
Foundation. Come save with us at spirit.com.
(a) Case 1:21-cv-11558;
https://www.justice.gov/opa/press-release/file/1434621/download
(b) JetBlue offers the most legroom in coach based on average
fleet-wide seat pitch for U.S. airlines.
(c) Fly-Fi and live television are available on all
JetBlue-operated flights. On ViaSat-2 equipped aircraft, Fly-Fi
will not be available on portions of some routes, and live
television will not be available while operating outside of the
contiguous U.S., or until the aircraft returns to the coverage
area. On all other aircraft, Fly-Fi and live television will not be
available while operating outside of the contiguous U.S., or until
the aircraft returns to the coverage area.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230307005916/en/
JetBlue Corporate Communications Tel: +1.718.709.3089
corpcomm@jetblue.com
JetBlue Investor Relations Tel: +1 718 709 2202
ir@jetblue.com
Spirit Investor inquiries:
DeAnne Gabel (954) 447-7920 investorrelations@spirit.com
Spirit Media inquiries:
Erik Hofmeyer Media_Relations@spirit.com
or
FGS Global Andrew Cole / Robin Weinberg / Emily Claffey /
Columbia Clancy Spirit@fgsglobal.com (212) 687-8080
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