A new bid for Spirit airlines is causing sparks to fly at Frontier Airlines.
JetBlue offered $3.6 billion for Spirit on Tuesday, casting more doubt regarding the prospect of a Spirit-Frontier merger.
JetBlue CEO Robin Hayes said the offer would make JetBlue a stronger competitor in an airline industry that is dominated by four powerhouses — United, Delta, American, and Southwest — which make up 80% of the domestic market.
“The number one complaint we get is why don’t you fly to more places,” Hayes told Reuters. “What we want to do is create a bigger JetBlue that can serve more consumers.”
FEDERAL PUBLIC TRANSPORTATION MASK MANDATE CONTINUES WHILE MOST HAVE BEEN LIFTED
Spirit had previously announced an intended merger with Frontier that would combine the two largest budget airlines into the fifth-largest airline in the country. However, the deal is expected to face scrutiny from the Biden administration.
The Department of Justice filed a lawsuit in September that seeks to block a partnership between JetBlue and American Airlines. The partnership would allow both airlines to coordinate services in the Northeast, CNBC reported.
Spirit said it was considering the proposal from JetBlue and will “pursue the course of action it determines to be in the best interests of Spirit and its stockholders,” according to a press release.
Frontier defended its deal with Spirit, stating that it made more sense for Spirit to go with Frontier, as the company is headquartered on the West Coast. Both JetBlue and Spirit are headquartered on the East Coast. Spirit is located in Florida, and JetBlue is in New York. Frontier also criticized JetBlue for attempting to strike another deal when it already faces a lawsuit from the DOJ.
“It is surprising that JetBlue would consider such a merger at this time given that the Department of Justice is currently suing to block their pending alliance with American Airlines,” the Frontier spokesperson told CNBC.
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The airline industry faces higher costs in fuel and labor, including a labor shortage, and has been hard-hit by the COVID-19 pandemic, which greatly harmed the travel industry as the world went into a nearly two-year shutdown.
