TTG – Travel Industry News
August 01, 2022by Gary Noakes
A deal that will gobble up one of Ryanair’s US equivalents may not seem to have much implications for the UK travel industry, but it will have repercussions for JetBlue’s purchase of Spirit Airlines for 7, $6 billion.
If regulators approve, then by 2024 the ultra-low-cost Spirit brand will disappear to be subsumed by JetBlue, which operates a hybrid model and now flies to the UK.
Until last year, JetBlue limited itself to the Americas and the Caribbean, but later launched flights to Heathrow and Boston. Its UK-born managing director, Robin Hayes, a former British Airways director, has ambitions on both sides of the Atlantic and the purchase of Spirit will bolster them.
First, the merger means JetBlue gains critical mass; the combined JetBlue/Spirit airline will carry 77 million passengers (compared to BA’s 44.6 million in 2019), serving more than 125 destinations in North, South and Central America and the Caribbean – and now with Heathrow and Gatwick to New York and Boston.
That will make it the fifth largest carrier in the United States, behind American Airlines, Delta, United and low-cost airline Southwest Airlines, which together control 80% of the market in the United States.
The deal also strengthens JetBlue’s major airports, particularly on the US East Coast. JetBlue has hubs in JFK, Boston, Orlando, Los Angeles, San Juan (Puerto Rico) and Fort Lauderdale – the latter being the headquarters of Spirit. Spirit also operates bases in Orlando, Miami, Houston, Detroit, Dallas/Fort Worth, Chicago, Atlanta and Atlantic City.
Several of these destinations – Dallas, Houston, Chicago, Detroit, Atlanta and Miami – are hub airports for the big four US carriers, which will increase competition and should lower fares.
Joining the dots with New York and Boston will provide more connecting opportunities for UK-origin passengers, while the renewed focus on Florida could see direct links established with the UK. JetBlue said it would “absolutely” add new routes after the merger.
The tools to do the job are already there or on order – the combined airline will have a fleet of 458 and an order book of more than 300 Airbus aircraft. However, the total is still far behind its nearest rival, Southwest, which has more than 730 devices. Southwest, unlike JetBlue, remains true to its primarily domestic roots and has no transatlantic ambitions.
Regulators must first give the go-ahead, but JetBlue estimates that even as the fifth-largest carrier, it and Spirit would only have a 9% market share, compared to 13% for Southwest and 23% for American Airlines. Approval is expected by 2024 and until then the two brands will continue to operate separately.
If approval is granted, the deal will be good news for agents. JetBlue is keen to deal with them as it establishes itself in the UK and the merger will bring an expanded network of destinations to book from.
Few, if any, agents would suggest Spirit Airlines as a carrier for customers wishing to connect to the US – although it does have an agent portal – but the JetBlue/Spirit Airlines combination will mean consistent branding and quality they can book with confidence.