beyondhere

Right before the pandemic, I flew Spirit. They had some new spiffy planes. Granted, seating space was tight, but it was a decent cabin. I just wonder why B6 would have to spend so much to retrofit all its planes to remove those seats and add seat back devices. Maybe they could operate a separate brand like JB Spirit for a number of planes intended with dense cabins, and just have to repaint the aircraft on those.

Maybe I'm too optimistic as I know a likely scenario is a complete gut of Spirit- an asset grab, and elimination of a competitor and relatively minor service increases to JetBlue in maybe LAX and SFO, while most of Spirit's network and capacity is lost turning out more anti-competitive than Southwest's acquisition of AirTran.

sfozrhfco

Spirit only has 56 leased aircraft and aside from the A319s, their planes are all very new-around 73 less than 5 years old. This in an of itself is very valuable. Getting to 675 aircraft by 2026--with a majority being new and fuel efficient can not be underestimated. There is no way an airline the size of B6 could organically grow that fast.

This is about growing revenue not about keeping costs down to NK's level.

sfozrhfco

It is quite simple. If your goal is to generate extra revenue, your customers are going to expect a particular product. You also don't want to have major parts of your fleet that can only fly on particular routes.

With a different product, you are serving different customers. 80% of the US market is taken by the big4 airlines. This helps B6 to compete with the actual competition--which is the big 4. B6 is nowhere near the scale of WN in the domestic market currently and the overlap with B6 routes and NK routes in only 11%. Where exactly will the combined carrier be the only option on any given route? A very small number if any.

Even with the NEA, NK adds a handful of flights at BOS, nothing at JFK, a few at EWR/LGA. The argument used for the NEA was to make AA/B6 more competitive with UA/DL in those markets. This will provide more competition with UA at EWR and thus keep UA's dominance in check--which is in an of itself pro consumer. Not every consumer is looking for the cheapest product--if they were we would all be walking around with $10 flip phones

DenverBrian

Highly doubtful. B6 isn't trying to acquire NK in order to have two airlines. I believe they'd want one set of aircraft standards, if for no other reason than interoperability during IRROPS.

It is likely much cheaper to refit and repaint planes to B6 standards (a one-time expense) than to attempt to operate two airlines inside a single carrier. See failed attempts for Ted (Rar!) and Song.

nsx

I would like them painted blue on the top half and yellow on the bottom half. License the design from Ukraine. Jet Yellow/Blue to make green.

beyondhere

deleted.

ctownflyer

But how many of those gates and slots will they have to divest of in order to gain regulatory approval for the merger?

Lomapaseo

They don't need any stinkin jet bridges as Spirit passengers are used to the stairs

beyondhere

With exception of FLL which I'm not sure, B6 wouldn't likely have to give up much at the other airports since it is significantly smaller than other carriers at these airports, even combined with Spirit. Any guess what will B6 do with the LGA slots? Just refocus on high frequency Florida, filling out MIA and MCO? Or could try something like launch LGA-ORD with a decent frequency?

beyondhere

I'm uncertain about EWR and its value that Spirit offers to this merger. JetBlue suspended EWR routes this summer, as it was least important to keep when times are tough. The Spirit flights target a low fare customer. Factor in United fortress hub and high airport costs, it's not like JetBlue will want to stick it through on routes like EWR-ATL even though Spirit flies it, and JetBlue has some history but not a very long history of operating the routes.

dtremit

There's really not that much difference between B6's new all-core A320 config and NK's all-economy A320 — B6 has 162 seats/27 rows and NK has 174 seats/29 rows.

The other NK A320 config (with Big Front Seats) is slightly denser (182 total seats and 31 rows), which is the same as their A320Neo config.

My guess is that as an interim step, JetBlue would just reconfigure NK A320s to 27 rows (replacing the BFS with EMS). I'd also guess some of the A320neos would quickly be in line for Mint configurations.

The A321ceo is the one plane where there's a sizable difference between the two — 200 seats / 34 rows on B6 vs 228 seats / 39 rows on NK. The B6 configuration is frankly kind of bizarre, though, particularly around the R2/L2 doors. Spirit only has 30 of these, though, so it wouldn't be a huge effect on the network if they lost capacity here.

I suspect the A319s would be gone pretty quickly.

B6's revised Blue Basic honestly doesn't offer a ton more frills than NK's Bare Fare — aside from the nicer cabin, snacks, and the freedom to avoid "gotcha" pricing penalties. No overhead carryon whatsoever (NK lets you pay for one), similar change fees. Just looking at random fares to FL in May, B6 seems to command a premium from some of their key markets like BOS, but e.g. on PHL-FLL nonstops they are actually undercutting NK.

I suspect the truth is somewhere in between — probably a net positive for people in JetBlue's focus cities and larger cities JetBlue doesn't currently serve well, and a net negative for leisure travelers from smaller markets. Undoubtedly there are some NK routes that just won't make sense for B6. NK's route map has some weird eccentricities — e.g., they fly to multiple FL cities from Latrobe, PA, which is 33 miles from PIT.

On the other hand, the NK fleet would give them a huge amount of extra capacity overnight, along with crew to operate it. That capacity could be redirected to the areas where B6 has planned growth but hasn't had the planes to implement it. NK also has a lot more strength in the Midwest, where B6 has struggled to grow — they're the #2 carrier at DTW, and have a decent number of flights from ORD.

NK's order book also gives them a lot of options. I suspect the A319neo orders would quickly be converted to A220. NK also has 100 A320/A321neo orders; if some of those could be converted to LR / XLR models, it would be a huge help in accelerating TATL service.

GW McLintock

$JBLU is approaching its 52-week low. To be expected, but this is low

-J.

DenverBrian

Live seatback TV. Wouldn't discount that as a significant value-add.

marathonerNYC

Definitely shocking how low it is going, but a good bit of that is certainly expected in typical stock price analysis! Typically acquirer-co shares dip on announcement (HBS) due to an increase in retail short-selling and academic theory also expects the momentum theory to be further exacerbated on merger announcements for acquirer-cos (UChicago) (that is, a cooling market [present] will be further hurt by M&A announcements, while a hot market is further lifted on M&A announcements, which are typically reversed in the long-term)

It will be interesting to see how the market reacts in the next few weeks as more details are released.

I'm most excited for more details how they plan to sell it to DOJ..."We strongly believe we can secure anti-trust approval and close the transaction and a definitive agreement would include contractual commitments designed to address regulatory concern, including a reverse breakup fee payable to Spirit" (Investor Call 4/6/22)

N830MH

Yes, That'll be great. They will be converted it to A220-100/300 or even -500, if they launched. I think some A321neo orders will be converted to A321LR or -XLR models. Yes, that will be big help. Hope it works.