A lawsuit seeking to kill the JetBlue-Spirit Airlines merger alleges it will hurt air travel throughout the country, but especially at Fort Lauderdale-Hollywood and Orlando international airports. Currently, there is vigorous competition between the two airlines at both airports — 19 of the airlines’ routes overlap in Fort Lauderdale and 12 in Orlando.
Between Spirit and JetBlue, about half of all passengers use either airline at Fort Lauderdale-Hollywood International. Spirit has a 30% market share, while Jet Blue sits at number two with a 19% market share.
The merger, which would eliminate Spirit Airlines, is already under scrutiny by federal regulators. A group of travelers and travel agents filed the current antitrust federal lawsuit challenging the merger and seeking an injunction to block it in December in the Northern District of California.
“Orlando and Fort Lauderdale would be especially hurt,” said Joseph Alioto, the lead attorney for the group, referring to the merger. “The whole point is for JetBlue to save money, and they will do it by eliminating flights and by raising prices.”
According to the lawsuit, Spirit is “a significant price-cutting rival of JetBlue, as well as a rival of the legacy carriers and other low-cost carriers. Approving the merger would allow JetBlue to gain a majority market share on more than a dozen routes where neither it nor Spirit previously dominated and it would eliminate price-cutting by Spirit.”
"The continued vigorous competition of Spirit is one of the few, if not the principal, remaining competitive forces in the market,” the lawsuit continues. “Its continued existence in the market is needed to preserve and protect the minimal amount of competition that exists in the airline industry today . . . Indeed, if there is to be any restoration of competition in the airline industry, Spirit is the airline that will cause it."
According to Alioto, Spirit has already made a case against the merger itself. When it supported a merger with Frontier Airlines last year, Spirit argued that a JetBlue merger would never win the approval of federal regulators, because it would in fact result in higher fares and halve the number of low-cost airlines.
However, Spirit’s shareholders refused to accept Frontier's offer after JetBlue offered to pay $3.8 billion for Spirit, or roughly $1 billion more than Frontier. Now, both airlines will see if Spirit made the right call.
