JetBlue Airways on Monday said it is “unfortunate” that another four states have joined a federal lawsuit against its buyout of Miramar-based Spirit Airlines, saying their position would only help tighten the grip that bigger airlines hold over the U.S. marketplace.
“The facts show that preserving the status quo is the most anti-competitive step that the federal government and these states can take,” the New York-based airline said in a statement.
Last Friday, state attorneys general from California, Maryland, New Jersey and North Carolina all signed on to a U.S. Justice Department lawsuit filed last month against JetBlue, along with the states of New York and Massachusetts, as well as the District of Columbia. In the suit, which seeks to block the deal, the state and federal governments argue that the proposed $3.8 billion takeover will reduce competition and drive up air fares.
“Fewer flights. More expensive tickets. Lower quality service. That’s what happens when competition is eliminated from the market for air travel,” California Attorney General Rob Bonta said last Friday. “I am committed to fighting for a fair and competitive economy — and I won’t stand by when a proposed merger threatens to further eliminate consumer choice and drive up prices. We need more options and higher standards, not less.”
From North Carolina, Attorney General Josh Stein asserted much the same: “This merger could decrease competition in air travel, leading to fewer flight options and increased costs for travelers. A merger might benefit the airlines, but it could harm their customers. That’s why I’m asking the court to block this deal.”
He argued that a JetBlue-Spirit combination would result in “a larger airline that has less incentive to offer cheap flights, making it easier for all airlines to increase their prices.”
“JetBlue and Spirit have multiple routes flying in and out of North Carolina,” Stein added, “including two popular flights to Miami-Fort Lauderdale originating from Greensboro and Raleigh.”
But in its statement Monday, JetBlue said the major airports serving New Jersey and North Carolina are dominated by even bigger airlines. The point of the Spirit acquisition, it has said, is to offset advantages held by American Airlines, Delta Air Lines, Southwest Airlines and United Airlines, which collectively control 80% of the U.S. market, according to industry officials.
“In Newark, United controls about 70% of the market, and in Charlotte, American Airlines controls about 90%,” JetBlue said. “Customers would be better served if JetBlue and Spirit can join together to bring more competition with the low fares and great service that JetBlue is known for. Further, in Newark, JetBlue plans to divest all of Spirit’s assets to allow for another ultra-low-cost carrier to enter that airport.”
The governments’ antitrust case, which is pending before a federal judge in U.S. District Court in Boston, is scheduled to go to trial on Oct. 16.
“We look forward to arguing the merits of this combination in court, and are confident the court will find that consumers will benefit from the increased competitive effect that JetBlue uniquely brings to the routes we fly,” JetBlue said Monday.
In the interim, both JetBlue and Spirit continue to fly independently of each other. But their executive teams have been acting in concert promoting the buyout, making public appearances and conducting meetings with public and private officials.
The discussions were heavily concentrated in Florida, where Attorney General Ashley Moody entered into a settlement with JetBlue for the merged airline to provide increased levels of service and employment across the state over multiple years.
In February, JetBlue announced a major Florida expansion in Fort Lauderdale and Orlando. The former would see an increase in operations to more than 250 flights a day.
Spirit on hiring binge
Spirit, meanwhile, is aggressively in the market for 4,000 new employees this year, including pilots, flight attendants and maintenance technicians, according to an announcement last Friday.
A flight attendant hiring event is set for Tuesday in Miramar while two pilot hiring events are scheduled in the same location for Thursday and April 11.
The pitch for flight crew members comes shortly after its unionized pilots entered into a new contract this year containing considerable pay hikes.
“We’re welcoming thousands of new Spirit family members across our network this year and have a broad range of positions available for people with all different interests, talents and experience levels,” Linde Grindle, senior vice president and chief human resources officer at Spirit Airlines, said in the statement.
The airline noted it took delivery of 21 new Airbus A320 jetliners last year, and intends to acquire 26 more planes this year.
The airline recently opened a maintenance facility at George Bush International Airport in Houston, and added new bases for flight crews in Miami, Atlanta and Houston and Miami, pushing the total to 10 home bases nationally.
Spirit serves nearly 100 U.S. and foreign destinations, including locations in Central and South America and the Caribbean, with more coming this year.
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