MONDAY MAR 04, 2024
×
Search AeroXplorer
The Future of JetBlue: Is the Airline in Serious Trouble?

The Future of JetBlue: Is the Airline in Serious Trouble?

BY FRANCO GROBLER 11/03/2023 AGO 0 COMMENTS

With an antitrust lawsuit and worse Q3 & Q4 than anticipated, JetBlue has seen some better days, but will this be the end of JetBlue?

 

Photo: Dylan Campbell | AeroXplorer

 

JetBlue has recently announced a buyout with Spirit Airlines worth around $3.8 billion, yes, that's right, a Billion with a B. Many argue that the airline overpays for a sinking airline, as Spirit has not been profitable in three years and holds only 3% of the market. Not only that, but Spirit has been facing more fortunate competition from larger airlines such as United, American, Delta, and Southwest.

 



ADVERTISEMENT • REMOVE ALL ADS

 

The Buyout

 

JetBlue began its proposed buyout of Spirit Airlines. But the DOJ is not happy. Filling an antitrust lawsuit against JetBlue. The DOJ argues that Spirit Airlines needs to be protected, and if JetBlue is to acquire Spirit, it will allow them to raise fairs by almost 30%, resulting in a $1 billion net loss annually to the consumer.

 

Photo: Andrew Salisbury | AeroXplorer

 

"JetBlue is counting on the fact that eliminating Spirit and the competition Spirit provides will allow JetBlue to raise fares," Markel said. "That is real harm to real people."

 

JetBlue argues that the merger will grow its fleet and stack it up against major airlines, resulting in the major airlines lowering their fees due to competing routes. Ryan Shores, JetBlue's attorney, said that the case was a "misguided" challenge to a merger that would result in a combined control of less than 8% of a domestic market. 

 

Photo: Ejaaz Cadinouche | AeroXplorer

 

They also offered gates and landing and takeoff rights to Frontier and Allegiant. This is what American and U.S. Airlines did back in 2013, but the DOJ rejected the offer, saying the carriers have already committed to fly to the same routes as Spirit currently does. 

 



ADVERTISEMENT • REMOVE ALL ADS

 

JetBlue stocks are at a 12-year low on Tuesday as the company's Q3 & Q4 have seen extensive losses. The company will have to defend its acquisition of the budget carrier in the Boston District Court. If the deal is blocked, the airline could potentially stand to lose $470 million, with a $70 million breakup fee and $400 million to Spirit shareholders.

 

Photo: Ben Allen | AeroXplorer

 

However, if JetBlue is to win, it will not only become the 5th largest airline in the United States but also make it one of the most significant mergers since 2016.

 

Previous Runs with the DOJ

 

This is not the first time JetBlue has encountered the DOJ or its abilities. In 2021, American Airlines and JetBlue had built a partnership in the northeastern U.S., but it ended with a court order from a Federal Judge.

 

Photo: Seth Johnson | AeroXplorer

 

While A.A. recently came out in June saying it would challenge the ruling against the JetBlue partnership, JetBlue has different opinions about the situation, saying that it would not appeal the decision by the Federal court or the DOJ.

 



ADVERTISEMENT • REMOVE ALL ADS

 AeroXplorer is on Telegram! Subscribe to the AeroXplorer Telegram Channel to receive aviation news updates as soon as they are released. View Channel 
Franco Grobler
Passionate aviation enthusiast from South Africa dedicated to bringing you articles on the latest aviation news, I aim to inspire and inform. I am set on embarking pilot training in 2024 to soar to new heights in the aviation world.

Comments (0)

Add Your Comment

SHARE

TAGS

INFORMATIONAL JetBlue Spirit Airlines Buyout Merger Legal Federal Government DOJ Finance

RECENTLY PUBLISHED

Mexicana de Aviación Switches to Embraer After Airline Ditches Boeing Order for Faster Launch In February, Mexicana de Aviación, a revived Mexican state-owned airliner, announced the order of ten Embraer jets slated for a May 2025 delivery. The switch to Embraer is unexpected, as initial partnerships were confirmed with Boeing, indicating the purchase of some 737s. NEWS READ MORE »
Neste’s Innovative Solution Will Reduce Companies’ Business Travel Emissions by Up to 80% Finnish refining company Neste introduced a new solution to help companies reduce their aviation emissions by purchasing sustainable aviation fuel (SAF). Neste Impact allows businesses to report carbon dioxide emissions reductions that align with their sustainability targets. NEWS READ MORE »
How Does Essential Air Service Benefit Small and Isolated Communities? The Essential Air Service program was implemented to guarantee that small communities served by certified air carriers before airline deregulation maintained a minimal level of scheduled air service. INFORMATIONAL READ MORE »


SHOP

$2999
NEW!AeroXplorer Aviation Sweater Use code AVGEEK for 10% off! BUY NOW

FOLLOW US ONLINE