NEWS: You Could Pay MORE for Flights Soon Thanks to This Airline Change

Spirit Airlines has been in the news quite a bit lately.

From placing a young child on the wrong flight to a Judge blocking the company’s merger with JetBlue Airways, Spirit has had a rough go of it these days. And, the JetBlue merger mishap may have a bigger impact than anyone originally thought.

A federal judge blocked the merger between Spirit and JetBlue, and that may be a bigger deal than you think. According to CNBC, Spirit’s uncertain financial future could have a major impact on travelers and airports.

©Joe Cavaretta, Sun Sentinel | Getty Images via CNBC

In his ruling, Judge William G. Young, “A post-merger, combined firm of JetBlue and Spirit would likely place stronger competitive pressure on the larger airlines in the country.” Larger airlines such as American, Delta, United, and Southwest control 80% of the nation’s commercial airlines. But he continued adding, “At the same time, however, the consumers that rely on Spirit’s unique, low-price model would likely be harmed.”

JetBlue and Spirit disagreed with the ruling and released a joint statement that said, “We continue to believe that our combination is the best opportunity to increase much-needed competition and choice by bringing low fares and great service to more customers in more markets while enhancing our ability to compete with the dominant U.S. carriers.”

The now-sidelined $3.8 billion deal would have expanded Spirit’s reach to smaller, regional airports. These airports are typically supported by travelers who come from neighboring states and offer more value with things like free parking, lower fares, and shorter TSA lines.

Spirit has already trimmed its schedule at many regional airports, like Arnold Palmer Regional Airport (LBE) which went from several daily flights to just one direct flight to Orlando.

But, it’s not just the airports who will suffer if the Spirit deal dies. The budget airline fills a need for leisure travelers, college students, and others looking for “no-frills fares.” Professor Jase Ramsey at Florida Gulf Coast University said “a Florida without Spirit hurts in two directions.”

First, he says, its absence from the market may raise prices for incoming tourists primarily from the north. But it will also prevent South Florida families heading to the Caribbean from finding affordable vacation options.

“This will be bad for our region if something happens to Spirit from a price perspective. They are usually our low-cost leader. If you want to do a family vacation out of here, that is your go-to airline,” Ramsey said. He continued that South Florida’s market depends on Spirit.

Spirit was a lifeline during Haiti’s civil unrest in 2018, offering direct flights to South Florida to those looking for refuge.

Paul Vaaler, professor at the University of Minnesota Law School and Carlson School of Management, said Spirit’s margins are so small that it makes it difficult for the airline to compete. He continued that the judge’s ruling, in his opinion, wasn’t sound and could be overturned on appeal.

“What I think the judge missed is that there is an offsetting beneficial effect of a merger; a large JetBlue could put more pressure on the legacy airlines,” Vaaler said.

One thing is clear, it doesn’t seem like this is the end of the Spirit and JetBlue merger, as the airlines appealed the judge’s decision. We’ll continue to keep an eye out for the latest updates as this story develops.

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