JetBlue, which is trying to save its planned $3.8 billion merger with Spirit Airlines, and is apparently prepared to make big concession to win approval, including giving up all of Spirit’s slots at New York’s LaGuardia Airport.
The airline, which won a bidding war with Frontier Airlines last year to buy the ultra-low-cost carrier, has cut a deal with Frontier that would give Frontier all of Spirit’s six gates and 22 slots at LGA once the merger is approved, allowing Frontier to increase its ultra-low-cost service from the hub.
JetBlue plans to absorb all of Spirit’s aircraft and operations into the JetBlue brand, and would continue to operate JetBlue flights from the airport, using its existing gates and slots.
The merger is currently on hold because of a Justice Department lawsuit asking to block it on grounds it would reduce competition and increase fares. JetBlue says the merger is necessary to allow it too provide more competition to the Big 4 airlines that together account for 80% of all passenger traffic.
The case is not JetBlue’s only legal issue at the moment; a Federal judge ruled that its Northeast Alliance with American Airlines was improperly approved and hurts competition. American and JetBlue have argued that it actually makes more competition for United and Delta, the dominant carriers in the areas. American has announced it is appealing the decision; so far JetBlue has not commented.
