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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

#91

Post by nerdponx »

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…

Yes. The oligopoly already exists, so allowing players to fold by preventing their merger only entrenches the oligopoly further. Who do you think is pick up the excess demand when Spirit goes under? Who will acquire all their assets and employees? Hint: not a new market entrant.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#92

Post by nerdponx »

filleduchaos wrote: post #87
ohashi wrote: post #49

Earlier quoted context omitted.

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.

It's a good example of how judges are ultimately not that different from politicians.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#93

Post by nerdjon »

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…

What were the reasons for that consolidation? Was it just simply that a small airline is not economically viable or is it a push for larger airlines?

Considering the talk around Spirit being on the verge of bankruptcy it seems like it may be a mix of the 2 and the first one being an important part of this conversation.

just saying lets fix the market while ignoring that there is a problem with the market with a potential thing to address part of it right in front of us is just passing on the problem until we have the perfect solution.

That perfect solution may not be viable or may be many years away for a variety of problems (not the least of which being just a space problem at airports).

We have a bad tendency to try to get the perfect solution to a problem which stops us from having anything.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#94

Post by chx »

nashashmi wrote: post #74
chx wrote: post #34

Better later than never, the Continental-United merger was an absolute disaster and should've never been allowed.

Great start to an interesting read... and then the end of a comment. /MildlyInfuriating.

Not sure what you would like to read. How Continental and especially Jeff Smisek took over United in a merger closely resembling McDonnel-Boeing, resulting in financial trouble, dysfunctional computer systems, dissatisfied consumers having significantly less choice? (Eventually Smisek got fired and only the corrupt US legal system kept him from criminal charges and out of prison.) All this is well known and I didn't feel like typing up 10+ years of sad history.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#95

Post by jpgvm »

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.

Don't be. This merger being blocked means JetBlue now won't acquire Spirit at an inflated valuation. Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes. So your favourite airline will likely get everything it wants (seems like they were willing to pay more than Frontier anyway) with nothing it doesn't. The only downside is they have to wait for bankruptcy proceedings which are about 4-6 quarters away looking at Spirits run-rate and revenue projections.

However you should be sad in general because this is a terrible judgement that dooms a business from taking the only way out that would have been a reasonable outcome for its employees, shareholders and users.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#96

Post by setr »

thehappypm wrote: post #90
haliskerbas wrote: post #79

Earlier quoted context omitted.

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.

To add credence to that statement… LAX to LAS is a $20 flight one-way through spirit. It’s cheaper to fly a family of four than drive. It’s wild how cheap spirit becomes on certain routes, especially short hops where you can trivially get away with nothing extra

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#97

Post by busterarm »

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.

I've flown on Spirit twice, as a side effect of living in Miami.

The last time I did they canceled my flight overnight at 2:30am and forced me to rebook my ~$300 flight at twice the cost -- and it was leaving the same airport at the same time to the same destination.

And it was a miracle that I woke up to the email alert and was able to rebook my flight before it sold out anyway.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#98

Post by sco1 »

jpgvm wrote: post #95
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.

Don't be. This merger being blocked means JetBlue now won't acquire Spirit at an inflated valuation. Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes. So your favourite airline will likely get everything it wants (seems like they were willing to pay more than Frontier anyway) with…

> Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes

I'm not familiar with how the process works, would JetBlue now have to compete with larger airlines for these assets if Spirit goes under?

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#99

Post by jpgvm »

sco1 wrote: post #98
jpgvm wrote: post #95

Earlier quoted context omitted.

Don't be. This merger being blocked means JetBlue now won't acquire Spirit at an inflated valuation. Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes. So your favourite airline will likely get everything it wants (seems like they were willing to pay more than Frontier anyway) with…

> Instead when the company is liquidated they can buy the airport slots they so direly need without all the extra debt -and- they get to pick through anything else they want like airframes I'm not familiar with how the process works, would JetBlue now have to compete with larger airlines for these assets if Spirit goes under?

Yes but this is likely still better than acquiring Spirits considerable debt load etc. The most likely competitor will actually be Frontier who also made an offer on Spirit. The big players generally have the allocations they are after already, hence their position in the market being so solid.

There is a risk of the big 4 just buying the slots to tie them up though, this happens a lot in markets like Australia which have very strict arrival/departure windows but is a lesser problem in markets like the US which throttle throughput based on ATC capacity instead.

Re: Judge blocks JetBlue from acquiring Spirit Airlines

#100

Post by YeBanKo »

busterarm wrote: post #97
haliskerbas wrote: post #79

Earlier quoted context omitted.

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.

I've flown on Spirit twice, as a side effect of living in Miami. The last time I did they canceled my flight overnight at 2:30am and forced me to rebook my ~$300 flight at twice the cost -- and it was leaving the same airport at the same time to the same destination. And it was a miracle that I woke up to the email alert and was able to rebook my flight before it sold out anyway.

And of course such a thing could have happen only with Spirit, right? Could not be any other airline. Like United would never cancel a flight without an ample notice and helpful customer success agents rebooking you trip hassle free.
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