As U.S. authorities responsible for enforcing antitrust laws prepare to adopt Attempt to block JetBlue’s acquisition of Spirit Airlines, JetBlue CEO Robin Hayes said the airline was disappointed but not unexpected.
“We’re disappointed, but not surprised,” Hayes said Tuesday on “CBS Mornings.”
“We said last year when Spirit shareholders approved the proposal that we didn’t expect to ‘close until the first half of 2024,’ you know, pending litigation,” he said.
US Justice Department lawyers may move to block the transaction on Tuesday, CBS News confirmed. A representative of the agency declined to comment.
Critics of the merger argue that taking Spirit out of the market would limit competition in an already concentrated industry.
But Hayes said the bigger problem is that the big four airlines each have 20% of the market share, while the rest of the airlines, including JetBlue, have the remaining 20%.
Buying, that is valued at $3.8 billion, In July 2022, it was announced after JetBlue outbid Frontier Airlines for Spirit. The merger would create the fifth largest airline in the United States.
According to Hayes, JetBlue’s goal is to expand its national reach by creating a larger company with JetBlue’s brand, products, employees and fares.
“This is not Pepsi buying Coke,” he said. “Together, we will be the fifth-largest airline by far, with 8-9% of the market.”
Combining discount carrier JetBlue and Spirit would give JetBlue a total of about 460 aircraft and more than 1,700 daily flights to more than 125 destinations in 30 countries, the airline said last year.
If the merger goes ahead, Hayes said there would be “a lot of upside” due to the addition of new markets and new destinations for travelers. He also said that the fares will be reduced.
“Every time JetBlue flies into a market, the fares will go down in that market,” he said. “It’s actually called the JetBlue effect.”
“The legacy airlines that fly the most capacity, they’re going to … lower their fares to match JetBlue. Therefore, it is beneficial for everyone,” he said.
“Here, JetBlue and Spirit together will be 8 or 9%,” he said. “Many people will still fly on other airlines. That’s where you save big dollars by having the bigger JetBlue.”
Hayes also announced this on the “CBS Mornings” program Direct flights between New York and Paris Starts June 29 and can be booked from Tuesday.
Alain Scherter contributed to this article