Originally Posted by Excargodog

You gotta wonder if these guys are even paying attention to the industry.

Both JetBlue and NK (F9 too, for that matter) are experiencing significant attrition, NK threatening to become simply an A320 type rating factory for the Big Three. Screwing around fighting the merging of the two airlines might not threaten the viability of JetBlue but it sure could for NK. and with the CA shortage at the regionals screwing up accessing new ATPs at that level, the 121 pilot shortage isn’t going away any time soon. If the DOJ f@rt s around too long, they are going to allow the Big Three who are now limited by training constraints to corner the market on mobile (ie, less than five year seniority) LCC/ULCC pilots plus all their flows. That WILL GREATLY INCREASE their current monopolistic advantages.

They draw this out long enough, DOT may kill off the LCC/ULCC model altogether.

Originally Posted by FriendlyPilot

This is the best reason I’ve seen to allow the merger. Its obviously in the best interests of the Big 4 for the merger to go through. It takes out a competitor (Spirit) and remove $4B of cash from another competitor (JetBlue). I hope it goes through.

Originally Posted by The701Express

I don't think the DOJ is thinking that many steps ahead.

Reading through their initial filing for the Clayton Act violation, the majority of the DOJ's complaints revolve around elimination of spirit on certain routes leading to the loss of ULCC competition against jetblue, which they feel has allied itself too closely to AA. The heft of this case is predicated on the ability of ULCC competition to keep prices low by unbundling ticket prices and being all mavericky with fees for extras. The rest of the complaint is that spirit doesn't follow along with price hikes initiated by other airlines through the Airline Tariff Publishing Company (ATPCO) (#52 on page 23), but on the next page in point #53 the DOJ quotes a Jetblue analyst stating spirit stays "at least one price point lower than the lowest structured fare", so there's an admission that spirit doesn't go as rogue on pricing as they'd like the court and public to believe and follow the leader to some degree, albeit less than other, full fare airlines. When nearly half the ULCC revenue is ancillary fees and selling enoigh tickets by stimulating new demand from a previously non-flying, cost-conscious market (page 11 #23 where they state prices drop while pax numbers increase on new spirit routes) the DOJ doesn't address how spirit doesn't have to worry as much about competing for the current traveling Publix, because they're not targeting most current legacy customers, only those looking for a bargain on the certain routes a ULCC can serve.

While the DOJ makes a fair point about spirit offering more daily flights than frontier and Allegiant and sticking with new routes for longer (page 9 #21), a quick look over at the spirit subforum will illustrate the spirit pilots' frustration with the airline's network failures in places like MIA and BWI.

The glaring hole in the DOJ case as far as I can see is the failure of the ULCC airlines to grow their network depth. Network breadth has rarely been an issue, plenty of medium to large markets have sufficient price sensitive demand for flights to MCO, LAS, FLL/MIA, etc. What network connectivity exists for passengers looking for connections beyond those one leg itineraries? Jetblue certainly has its own network failures, especially for places that don't touch saltwater, but the number of small to medium size markets with multiple daily flights (ROC, SYR, ORH, BTV) that allow access to the greater network, similar to a hub and spoke legacy carrier, is a benefit the ULCC sector has failed to achieve at significant scale to date. Jetblue pre-covid used to tout their very low rate of passengers with connections, now I'm seeing more passengers connecting on to other flights than before 2020. This is purely anecdotal, but the strategy supported by jetblue's FLL 250 plan. If you're flying from EWR-IAH on a budget, you have a ULCC option. Need to get from ROC-IAH? You're stuck with the big 4, jetblue, or driving to the nearest ULCC market. Oh, and that EWR-IAH spirit flight the DOJ is celebrating so much? This weekend it's only operating once a day compared to the eight a day on united. Maybe the majority of the traffic on that route is connecting at IAH, so how about a more O+D route like BOS-SJU the DOJ references? A random selection of different days of the week the next two months shows spirit maxing out at two flights a day, others at only one compared to the consistent three daily flights on jetblue. The ULCC network is a mile wide but an inch deep. When ULCC management aims most of their growth at entering new markets instead of developing market relevance in their current hubs, it suggests the business model has limited appeal beyond high demand, relatively price sensitive, mostly leisure or vfr markets. There's a lot of the traveling public that needs affordable airfare paired with a relevant network that exists outside of that.

The DOJ also makes a big deal about jetblue removing seats from spirit aircraft, which while true for the current fleet, doesn't necessarily apply to the order book. Given jetblue's order book of only 321neos, it wouldn't surprise me to see Spirit's 319neos and 320neos converted to 321neos, representing a gain in the number of seats per aircraft delivered if they're configured with 200 core seats. That's not a guarantee, but is definitely a real possibility. Seats per aircraft isn't even the most important variable for capacity, it's ASMs. Allegiant has tons of seats but hardly flies their planes, producing few ASMs. Spirit's average daily utilization is pushing up towards 11.7 hours per day, but that is still less than what jetblue was able to achieve, granted pre-covid, on the 320/321 fleet of greater than 12 hours per day. If jetblue can increase the fleet utilization back to pre-covid levels, a 10% utilization advantage can make up for a big difference in ASM production between the two business models.

I've gotta wrap this up before I get accused of being a jetblue fan boy. I have serious issues with how jetblue has failed to make a strong case for the post-merger airline's relevance outside of FLL and to a lesser extent LAX. Spirit has great bases in major markets where the big 4 have almost zero competition like DTW and DFW, but jetblue has failed to make any argument for how they'd win those markets.

​​​​​The fact that I, a casual observer of the industry, can formulate a reasoned argument against much of the DOJ's complaint doesn't bode well for their chances, which has led me to believe that the DOJ doesn't care if they lose this case. They admit that the US airline market is already highly concentrated, yet fail to pursue any corrective action address that issue. They admit the ATPCO is used as a means to launder price fixing, yet offer no remedy solve that issue. A. DOJ interested in making real, constructive change to improve conditions for consumer's would pursue trust busting focused on increasing competition in highly concentrated markets, instead they only seek to maintain the status quo.

This DOJ case is about messaging to the rest of any industry that further consolidation will be fought, so company's must be prepared to incur a great cost as a result, and the vibes that the government is back on the side of consumers. Those can both be accomplished even when losing a court case.
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Originally Posted by METO Guido

blob slob mob of cheapo fare hunters

Originally Posted by PSU Flyer

Are you saying that the Big 4 want this merger to happen?

Originally Posted by FriendlyPilot

This is the best reason I’ve seen to allow the merger. Its obviously in the best interests of the Big 4 for the merger to go through. It takes out a competitor (Spirit) and remove $4B of cash from another competitor (JetBlue). I hope it goes through.