The UNEXPECTED Winner in This Airline MERGER!

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Published 2022-08-28
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With the Jet Blue & Spirit Airlines takeover all but complete, who among the carriers are set to gain the most from this deal? The answer might not be obvious to you at this stage, but stay tuned for all of the latest information and all will become clear...

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Chapters
-----------------------------
Start 00:00
Beginning 01:27
Share Management 02:22
Jet Blue Entry 03:27
Ground News 05:42
Jet Blue, why? 07:00
Virgin and JetBlue 08:38
Negotiations 09:35
The vote 11:24
The winner 12:45

Sources
-----------------------------
Ā Ā Ā ā€¢Ā SpiritĀ AirlinesĀ |Ā TogetherĀ WeĀ SoarĀ Ā 

Ā Ā Ā ā€¢Ā SpiritĀ Airlines|Ā SoaringĀ AboveĀ andĀ Be...Ā Ā 

www.bloomberg.com/news/articles/2022-07-28/jetblueā€¦

www.ft.com/content/29a96660-e579-4e4b-8def-a99bbf0ā€¦
www.frontier-economics.com/uk/en/news-and-articlesā€¦

finance.yahoo.com/news/these-2-big-airlines-may-shā€¦

abcnews.go.com/Business/story?id=88803&page=1
www.bbc.com/news/business-35960128

www.reuters.com/business/aerospace-defense/spirit-ā€¦

www.traveloffpath.com/spirit-and-frontier-merge-toā€¦

www.aerotime.aero/articles/30167-frontier-spirit-tā€¦
www.routesonline.com/news/29/breaking-news/297526/ā€¦

www.fool.com/investing/general/2013/08/01/spirit-aā€¦

www.reuters.com/business/aerospace-defense/jetblueā€¦

news.yahoo.com/why-jetblue-trying-purchase-spirit-ā€¦

www.reuters.com/business/aerospace-defense/jetblueā€¦

www.nytimes.com/2022/05/16/business/jetblue-spiritā€¦

www.thestreet.com/investing/trading-jetblue-jblu-sā€¦

www.forbes.com/sites/roberthart/2022/07/28/jetblueā€¦
theaircurrent.com/analysis/frontier-wins-in-jetbluā€¦
loyaltylobby.com/2021/09/21/american-airlines-jetbā€¦

All Comments (21)
  • @Bare_Essence
    Great review the mergers. Something we don't usually get. Fair, unbiased, and in depth overview. Thanks
  • Interesting insight into the markets and corporate side of aviation. Perhaps with healthy balance sheets Frontier will now look at acquiring another ULC carrier, such as Allegiant.
  • Never heard of Frontier Airlines until today, now I've not only found out they have adorable animals on their planes, but they name them too! Wish we had that in the UK/Europe. (I ā¤ļø bunnies!)
  • B6 wants the fleet and crew + slots. Organic growth would take 8-10yrs. Spirit has an order book of 100airbus you put that together and its basically instant growth.
  • @Ed_Stuckey
    0:37 "A lot of airlines all over the world and in the United States..." We're a whole 'nother world! šŸ˜‚
  • With engines making a significant percentage of the cost of an aircraft, this could be a major reason why Jet Blue are so interested in Spirit. Same A320 family, same IAE/ Pratt & Whitney's powerplants.
  • @RiftWalker111
    Thank you for clearing things up, I regularly fly on JetBlue and thought them merging with spirit would be awful but after watching this doesn't sound so bad. Also props to Frontier for being the underdog and with such a twist!
  • Having flown on Frontier, they actually are a good low cost airline. I hope they are able to expand more in the future. Iā€™ve never flown on JetBlue but itā€™s always looked like a premium airline.
  • @ground_news
    Great working together! Thank you for helping spread our mission. To those of you interested in getting the full picture of issues like the one in this video, check out the link in the description and let us know if you have any questions.
  • As a passenger, I fly choose airlines by my own past experience. JetBlue has been great, especially a few years ago when flying on Feb 15 the day after the weather played a part in causing havoc with JetBlue flights. My cancellation was handled in a way that I felt they considered my wishes & solidified my loyalty to them. I once made a 48 hr visit to Minneapolis/St. Paul & flew Frontier. It was a good experience & the price was unbelievable. I have never flown Spirit but have known plenty of young people whom have & just heard NEVER again! So, from this, I feel skeptical of any airline associated with Spirit. Also must say, admired the way Frontier was on it when they had an Ebola exposed passenger between Atlanta & some airport in Ohio & had located the aircraft & taken it out of service very quickly before CDC (šŸ™„) even got around to addressing the travels of this passenger. Holding no stock with any airline, my views are contingent on service rendered.
  • JetBlue has been my favorite airline for 10+ years. The idea that they will start offering LAX to OAK flights is a complete game changer. Couldnt be happier w this merger. I hope they get some widebodies and start doing long hauls as well.
  • @mattheww2797
    The other thing here to remember is that JetBlue is not merging with Spirit, they are buying them outright, Frontier was trying to merge with Spirit. Buying Spirit outright means they will no longer exist and can simply offer the Spirit employees new jobs regardless of their senority.
  • @LaurenV2500
    There are a couple of important issues to note that you did not cover, or even stated incorrectly: The vote that kept being postponed was not a choice on which merger to accept, but the stockholder's vote on whether or not to accept the Frontier merger, which in addition to cash came with stock in the new company as well as seats on the board of directors, unlike the JetBlue offer, which is to be straight cash for shares: no stake in the new company. As of the announcement on July 28th, there has been no date scheduled for a shareholder vote on the JetBlue deal yet, and no further information regarding stockholder approval has been publicly released to Spirit's investor relations portal since. The language in the press release announcing the JetBlue merger proposal reads extremely similar to the one released in February announcing the Frontier merger proposal. It's still all tentative at this point: there's been far too much assumption that it was an either or choice, when Spirit shareholders could still vote no on the JetBlue proposal, though this is thought to probably be unlikely, which is likely why all the news outlets are running with the misleading title that the JetBlue bid has already been accepted, when in fact what was accepted was merely a merger proposal. Spirit's recent acquisition of slots in the New York area in particular, an area where JetBlue are already very strong--as is their new partner American, who are also partners with Alaska, the latter recently having joined the oneworld alliance that American was a founding member of. I would think that regulating authorities are not going to be keen on this triparte alliance gaining even more ground on an already fairly uncompetitive market, a market honestly Spirit made a bit more competitive since the megamergers of a decade ago. Of particular concern in cases of route overlap is Florida. JetBlue have their largest base outside of the New York/Boston area at Fort Lauderdale. It's also Spirit's largest base. All three airlines in question have a base in Orlando as well, it being Frontier's largest, and Spirit's third largest. Even with it being their largest base, Frontier operates most routes on a daily or sub-daily frequency. Spirit usually operates once or twice, sometimes thrice daily. JetBlue have a much more frequent operation up and down the east coast especially. Where routes overlap, a Frontier/Spirit combination would have been more likely to add their flight frequencies together, whereas a JetBlue/Spirit combination is likely to drop their combined frequency, reusing the Spirit slots for other routes, likely to lead to higher fares, which of course regulators are not keen on... Furthermore, the Las Vegas base simply does not make sense for JetBlue. It's both Spirit and Frontier's second biggest base. Vegas makes a lot of sense as a base for a budget carrier with daily or sub-daily flights to many destinations, not so much for a more premium, higher frequency carrier like JetBlue. What they want is to increase their operation at LAX. Slots there are hard to come by, and everyone wants them: just about every US airline has a base or focus operation at LAX, with a notable exception of Frontier. Acquiring Spirit's slots and gates would allow them to nearly double their operation at LAX. Even as a combined unit, they would still be a relatively small player there: the big four and Alaska would all be sizably larger than the merged company, and Alaska and United especially long established at LAX with a loyal customer base, especially on routes up and down the west coast. Spirit passengers would almost undoubtedly face higher fares out of LAX, with the alternatives to paying the higher fare being Allegiant--which keeps very low frequencies to many minor destinations, so not always a viable alternative for most passengers who flew Spirit--or to travel to Ontario to fly Frontier, or even simply to drive the whole way instead. If JetBlue goes all in on trying to keep a customer base at LAX, it could sacrifice their LAS operation, a destination where low fares are particularly critical as you're meant to spend all your money there rather than on travel. JetBlue's premium focus will not attract the same customer base: any increase in price will send customers straight to Frontier, Sun Country, and Allegiant, allowing them to grow as direct consequence of JetBlue's actions. The results would be lost customers at LAS and failure to gain customers at LAX. I give it a decent chance Spirit Airlines survives the merger debacle. Do note Spirt didn't put themselves up for sale, both Frontier and JetBlue's bids were unsolicited. Their performance through the pandemic and into the merger talks has been strong, and only strengthening as the process evolved. Spirit could actually be the big winners in the end, and JetBlue very well indeed may be shooting themselves in the foot, whether the deal goes through or not. PaxEx is good and all but only matters so much: at the end of the day, price is king. People rearrange their entire days, weeks, months even, to save $20 on a return ticket. Plenty will say "never again" to the likes of Spirit, Frontier, Ryanair, and EasyJet, and then go right back to them when they can get a deal, only to complain more.
  • @pissant145
    Absolutely love this aviation news channel. Grymt jobbat, fortsƤtt sƄhƤr! <3
  • A Frontier-Allegiant merger might be a fantastic alternative as far as ultra-low-cost goes.
  • @mocafrost
    Great video as always. Thank you. I regularly watched your content when I was seeking an airline job and trying to get up to speed. It's been a while. Still great stuff a few years later.
  • Iā€™ve watched the Saga go on for quite a while and am intrigued by the unique motivation of JetBlue. I am a frequent flyer of spirit because I usually travel with just a backpack and donā€™t expect extra serviceā€¦ I am purchasing exactly/only what I want. I am usually much more cautious about mergers than the justice department has been in the last couple decades and I believe the ULCC market competition will lighten up too much. Sure, this probably will encourage some additional ULCC upstart or growth in someone like Suncountry but that will take years to come to bare.
  • Hey as a non hard-core aviation guy. I gotta say I have alot of respect for your ability to look at the third person and it's honestly easy to forget you're actually payed by atleast one of these companies. Good job to you for bringing honesty over all else. Unlike other creators I never see comments or posts saying you were lying or said something wrong. Sure mistakes happen but you seem pretty good at avoiding them. Thanks for being a great YouTuber.
  • Love these wider aviation industry stories, in addition to the more flight related ones! ! šŸ‘