Would love to see ULCC segment grow much larger similar to how Ryanair has managed to become the far largest airline in Europe. I’d bet on ULCC model and rather have JetBlue turn into Spirit than current proposal. #KeepSpiritFree
No other airline merger has been looked at this way - DOJ normally focuses on overlapping routes and overall dominance, both of which are not real concerns here. It is suggested that a small airline "needs" scale ("distressed carrier") - but jetBlue doesn't say they can't survive without Spirit.
No other merger has effectively picked a winner; the Market is left to decide whether NW or CO or US management and business practices should prevail. Would DOJ like the merger if SAVE were the victor here? Quite ironic given the govt attitude to Spirit ten years ago when they began charging for carry-ons!!!!
Brian, another point: Although airline mergers have always been analyzed based concentration (including use of the HHI), the SABRE/Farelogix merger was disallowed in part in fear that big SABRE would eliminate the disruption inherent in Farelogix (although I disagreed with that view). Maybe that's a similar case here.
Not the most important point here, but I think this merger shows how there are really only two U.S. airline business models nowadays: the ULCCs and everyone else. The concept of the LCC has pretty much vanished.
Many airlines like JetBlue which initially began as LCCs sooner or later began relying more heavily on connecting customers through hubs, incorporated a diversified fleet, and invested in premium products to attract higher-paying customers. This ties back to the bloated and higher-cost JetBlue of today which you described.
So the question on fares going up is real, since in my view, only ULCCs have the business model to sustainably offer low fares to price-sensitive consumers.
Would love to see ULCC segment grow much larger similar to how Ryanair has managed to become the far largest airline in Europe. I’d bet on ULCC model and rather have JetBlue turn into Spirit than current proposal. #KeepSpiritFree
No other airline merger has been looked at this way - DOJ normally focuses on overlapping routes and overall dominance, both of which are not real concerns here. It is suggested that a small airline "needs" scale ("distressed carrier") - but jetBlue doesn't say they can't survive without Spirit.
No other merger has effectively picked a winner; the Market is left to decide whether NW or CO or US management and business practices should prevail. Would DOJ like the merger if SAVE were the victor here? Quite ironic given the govt attitude to Spirit ten years ago when they began charging for carry-ons!!!!
Brian, another point: Although airline mergers have always been analyzed based concentration (including use of the HHI), the SABRE/Farelogix merger was disallowed in part in fear that big SABRE would eliminate the disruption inherent in Farelogix (although I disagreed with that view). Maybe that's a similar case here.
Not the most important point here, but I think this merger shows how there are really only two U.S. airline business models nowadays: the ULCCs and everyone else. The concept of the LCC has pretty much vanished.
Many airlines like JetBlue which initially began as LCCs sooner or later began relying more heavily on connecting customers through hubs, incorporated a diversified fleet, and invested in premium products to attract higher-paying customers. This ties back to the bloated and higher-cost JetBlue of today which you described.
So the question on fares going up is real, since in my view, only ULCCs have the business model to sustainably offer low fares to price-sensitive consumers.