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Judge blocks JetBlue from acquiring Spirit Airlines

nytimes.com

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Re: Judge blocks JetBlue from acquiring Spirit Airlines

#81

Post by oceanplexian »

ohashi wrote: post #49
dkjaudyeqooe wrote: post #39

Earlier quoted context omitted.

Besides that it's a bad ruling because the US spent years allowing mergers between large players that were clearly anti-competitive, and now in the environment of dominant airlines, it's applying the rules that it should have to the big players, but to smaller airlines who are now at a disadvantage due to their size. It's an utterly feckless uneven application of the rules to everyone's detriment. You couldn't have d…

So it's a bad ruling because previous administrations didn't try to enforce anti monopoly laws? Why not view it as, this is a good start and hoping it continues to prevent even more consolidation and monopoly in airlines and other industries? The notion that there has to be more consolidation to compete is only good for the companies monopolizing - not the consumer. Why should we be helping them make more profit by a…

It’s bad because the government is artificially manipulating market forces and prevents price discovery. Imagine you’re thinking of starting a small airline, like a Jetblue or Spirit, but investors know that if the business ever plans to exit through an acquisition, the government will intervene. Well, as an investor I’d be a lot less likely to invest.

As a result, you stifle the free market and prevent the emergence of competition. The knock on effect is less choice for the consumer and a less efficient market.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#82

Post by avbanks »

nerdix wrote: post #62
taspeotis wrote: post #37

Earlier quoted context omitted.

Yup, a firm monopoly on videogames if you ignore consoles [1], and PC (Steam, Epic) and mobile. [1] https://www.ign.com/articles/ps5-has-outsold-xbox-series-x-a...

Last I checked JetBlue isn't a monopoly either (quite the opposite, in fact). That suggests that there are other reasons to block a merger other than preventing a monopoly from from growing.

That was the joke.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#83

Post by [deleted] »

dkjaudyeqooe wrote: post #39
jsyang00 wrote: post #6

This is a bad ruling, Spirit is likely to go under without acquisition. Neither firm had particularly large share of market.

Besides that it's a bad ruling because the US spent years allowing mergers between large players that were clearly anti-competitive, and now in the environment of dominant airlines, it's applying the rules that it should have to the big players, but to smaller airlines who are now at a disadvantage due to their size. It's an utterly feckless uneven application of the rules to everyone's detriment. You couldn't have d…

[deleted]

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#84

Post by TinyRick »

haliskerbas wrote: post #79
dtnewman wrote: post #46

I am personally happy with this decision. I don’t love flying spirit but I respect them, ever since hearing their former CEO speak on a Planet Money podcast. He said straight up that Spirit Airlines is aiming to be the Dollar General of the skies. If you want something luxurious, go elsewhere. But he called out the other airlines who pretend like they are the Nordstrom of the skies, but don’t actually live up to that…

Spirit also doesn’t live up to that in my experience. Their cost structure nickel and dimes the consumer so much that by the time you get to the destination you may have paid more for a much less comfortable trip. At least in my anecdotal experience.

> Their cost structure nickel and dimes the consumer so much that by the time you get to the destination you may have paid more for a much less comfortable trip

That lends more credence to the comparison against Dollar General and similar discount stores. Dollar stores generally charge a higher price relative to quantity, but they offer smaller quantities than big box stores which allows their customers to spend less (but also get a lot less). Wendover on YouTube did a video on this recently [0].

[0] https://www.youtube.com/watch?v=vQpUV--2Jao

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#85

Post by adabyron »

rising-sky wrote: post #78
adabyron wrote: post #65

Earlier quoted context omitted.

It should be noted that these were 2 small airlines trying to merge together with very little overlap & a willingness to divest more if the Government would work with them. The government refused to talk divestures & it seemed just wanted to block this deal to set a precedence. I do not think they care about Spirit's future or competition here. Another important item from the trial - only 1/3 of Spirit customers pay…

> Rivals on average cut prices 7% to 11% when Spirit enters a market[1][2]. The same cannot be said for JetBlue > “If JetBlue were permitted to gobble up Spirit — at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline,” Young wrote. “… Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a m…

On the first 2 arguments - Spirit was able to be successful for a few years. That's no longer the case. They're not profitable. I believe this was stated by multiple airline CEO's publicly.

> That's a bit hyperbolic. If it does crush anti-competitive / anti-trust mergers, that's a win in any capitalist's book

The judge literally ruled here that a very small market (1/3 of customers on a small airline) would be harmed. JetBlue was also willing to discuss divestures & the government refused because they didn't care about competition or working with JetBlue. They have been doing weak cases for the past few years in hope to get any precedence set that makes M&A harder.

The judge uses the DOJ's expert witness's findings even after agreeing with JetBlue's team that the witness's model was completely broken.

This was a pro-competitive merger in my opinion because it created a stronger rival for the big 4, albeit still roughly half the size of most of them.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#86

Post by FarMcKon »

nerdjon wrote: post #80

As someone who basically flys exclusively JetBlue when I have the choice, I am disappointed by this. JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines. I don't understand how this is bad for competition when we desperately need more competition that can actually compete.

We had 14 regional / internal to the US airlines in the 80's. We had 10 airlines in the '00's. We have basically 4 or 6 national / regional airlines now.

"JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines."

That is like 'Their political party is cheating, we need to cheat bigger to win". That is leaning in to making the situation more and more rigged, more and more of a failed market / system.

I will leave it as an exercise to the reader to go read about how less players in a market bad for competition. Matt Stoller is a good place to start.

JetBlue can bid for slots at an airport, like anyone else. If bigger airlines are blocking them, lets fix that market to be competitive, NOT "let's help the market degrade into Oligopoly faster".

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#87

Post by filleduchaos »

ohashi wrote: post #49
dkjaudyeqooe wrote: post #39

Earlier quoted context omitted.

Besides that it's a bad ruling because the US spent years allowing mergers between large players that were clearly anti-competitive, and now in the environment of dominant airlines, it's applying the rules that it should have to the big players, but to smaller airlines who are now at a disadvantage due to their size. It's an utterly feckless uneven application of the rules to everyone's detriment. You couldn't have d…

So it's a bad ruling because previous administrations didn't try to enforce anti monopoly laws? Why not view it as, this is a good start and hoping it continues to prevent even more consolidation and monopoly in airlines and other industries? The notion that there has to be more consolidation to compete is only good for the companies monopolizing - not the consumer. Why should we be helping them make more profit by a…

> So it's a bad ruling because previous administrations didn't try to enforce anti monopoly laws?

Alaska Airlines literally just bought Hawaiian. It hasn't even been two months.

Framing the block of an attempted merger between two airlines that combined are worth less than Alaska (which is itself far from an industry titan) as "anti-monopoly" is simply inane.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#88

Post by nerdponx »

FarMcKon wrote: post #86
nerdjon wrote: post #80

As someone who basically flys exclusively JetBlue when I have the choice, I am disappointed by this. JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines. I don't understand how this is bad for competition when we desperately need more competition that can actually compete.

We had 14 regional / internal to the US airlines in the 80's. We had 10 airlines in the '00's. We have basically 4 or 6 national / regional airlines now. "JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines." That is like 'Their political party is cheating, we need to cheat bigger to win". That is leaning…

The market has already degraded into oligopoly. Spirit and/or JetBlue folding will only make that worse.

This seems to be a common theme in politics. A bad decision was made by the previous generation. Now the current generation, seeing that the decision was bad, makes decisions that should have been made in the first place. The problem now is that the bad decisions have already been made, and what at one point would've been a good decision is now either exacerbating the problems caused by the bad decisions or is at best failing to remedy them.

It comes up a lot in healthcare and immigration for example. What constitutes good policy is highly conditional on the current state of the world.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#89

Post by dgfitz »

coldcode wrote: post #71
tyingq wrote: post #67

Earlier quoted context omitted.

Spirit runs with a 28 inch seat pitch, which is often physically shorter than the distance between someone's rear end and knee caps[1]. It's an unusual choice. Most other low cost carriers have 31 inches or more. I'm not sure Dollar General is the right comparison. [1] Once you account for the padding, the angle you have to sit at, etc. Even if you aren't unusually tall, it is noticeably awkward and cramped.

I have never flown Spirit due to being 6'5". 30 in seat pitch is anatomically the limit, and that hurts. JetBlue having 33 in makes it a good choice for me.

I am the same height, and I have, and by golly was it a miserable flight. Never again.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#90

Post by thehappypm »

haliskerbas wrote: post #79
dtnewman wrote: post #46

I am personally happy with this decision. I don’t love flying spirit but I respect them, ever since hearing their former CEO speak on a Planet Money podcast. He said straight up that Spirit Airlines is aiming to be the Dollar General of the skies. If you want something luxurious, go elsewhere. But he called out the other airlines who pretend like they are the Nordstrom of the skies, but don’t actually live up to that…

Spirit also doesn’t live up to that in my experience. Their cost structure nickel and dimes the consumer so much that by the time you get to the destination you may have paid more for a much less comfortable trip. At least in my anecdotal experience.

Yes. But this is super transparent on their site. You can get super cheap flights if you don’t care about checking bags, in-flight sodas, and so on.
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