JetBlue puts profits over people: JetBlue’s acquisition of Spirit Airlines must be stopped

As the U.S. air travel industry continues to recover post-pandemic, America deserves steadfast competition in its airline industry, with our domestic airlines competing to offer innovative solutions that lower prices and improve customer experiences. Unfortunately, for residents of my district and many others in the Northeast, New York City-based JetBlue Airlines — and its impending acquisition of Spirit Airlines — is standing in the way.

Last week’s revelation that JetBlue plans to raise prices on Spirit Airlines routes by up to 40% if its merger with Spirit goes through is appalling; however, it is not unexpected. Rather, it is just the latest chapter in JetBlue’s ongoing saga to undermine free markets at the expense of consumers, and it’s time Americans took notice.

Like other airlines, JetBlue incurred heavy losses during the COVID-19 pandemic. Yet, instead of working to recoup these losses by innovating and outworking its competitors, JetBlue has spent the past few years trying to shortcut airline competition altogether.

In 2020, JetBlue commenced its “Northeast Alliance” with another top domestic airline — an anticompetitive partnership which resulted in these two airlines booking passengers on each other’s flights, sharing airport gates, and splitting revenue in the New York and Boston markets. Recognizing this as a dangerous regional monopoly, the DOJ filed suit in September 2021 to unwind the Northeast Alliance. According to the DOJ’s calculations, JetBlue’s Northeast Alliance may have cost travelers in the Northeast approximately $700 million in higher airfare prices annually.

Mercifully, on May 19 a federal court struck down the Northeast Alliance as anticompetitive, holding that the Alliance allowed JetBlue and its supposed competitor to effectively “function as a single airline” in the Northeast.

In July 2022, while this initial DOJ antitrust lawsuit was still pending, JetBlue finalized its ignominious hostile takeover of Spirit Airlines — a deal which was initially rejected by Spirit’s board of directors based on antitrust concerns. Unsurprisingly, JetBlue’s actions resulted in the DOJ filing a second antitrust lawsuit against JetBlue in March 2023 to block this merger.

JetBlue’s acquisition of Spirit Airlines would be disastrous for U.S. travelers. According to an MIT study, the presence of a single “ultra-low-cost carrier” on a U.S. flight route decreases the average price of all other flights on that route by 21%. Spirit is by far the largest U.S. ultra-low-cost carrier, controlling about half the ultra-low-cost market. Spirit’s outright removal from the airline industry would have devastating consequences for consumers — especially for lower-income flyers.

In contrast, JetBlue’s prices place it well outside of the “ultra-low-cost” category, while data from the Department of Transportation also shows that Spirit is the lowest-cost U.S. airline on roughly twice as many of the most popular U.S. routes as JetBlue. Given JetBlue’s stated desire to purchase Spirit to “build a bigger JetBlue,” logic dictates that this merger will inevitably raise prices on Spirit’s current flight routes.

Yet, despite common-sense logic, JetBlue has steadfastly claimed that its merger with Spirit would benefit consumers — which brings us to last week. According to court filings that were improperly unredacted by the plaintiffs’ lawyers in separate consumer lawsuit to block JetBlue’s merger, it was revealed to the world that — should JetBlue merge with Spirit — JetBlue plans to raise fares on current Spirit flight routes by at least 24%, with increases as high as 40% on some routes. While JetBlue claims that these internal documents were “taken out of context,” the company’s history of anticompetitive and self-serving behavior proves otherwise.

In 2020, immediately after receiving $935 million in COVID-19 bailout funds to help airline employees remain afloat during the pandemic, JetBlue went ahead and contravened Congress’ intent by cutting employee pay and benefits. Additionally, in 2022, while the DOJ’s Northeast Alliance lawsuit against JetBlue was still pending, JetBlue brazenly announced that it would be expanding its Northeast Alliance to apply to even more flight routes in 2023 — in overt defiance of the DOJ.

Fortunately, this behavior would come back to bite JetBlue, as in March 2023, the DOJ’s lawsuit to block JetBlue’s Spirit merger expressly referenced JetBlue’s Northeast Alliance as evidence that JetBlue could not be trusted to behave competitively. In response, JetBlue finally agreed to unwind its Northeast Alliance this past July — but did so only to save its merger with Spirit.

JetBlue’s anticompetitive, price-gouging practices have harmed Americans — especially in New York. JetBlue’s acquisition of Spirit would only make things worse, by reducing flight routes and raising prices.

In fact, the proposed JetBlue-Spirit merger appears to have only one beneficiary: JetBlue. As the nation prepares for the impending October 2023 trial in this merger case, it would do well to remember this.

Espaillat represents northern Manhattan and parts of the Bronx in the U.S. House.