Court proceedings tend to bring out revelations during the
trial. Here’s one.
During the Department of Justice antitrust lawsuit looking
to block the merger between JetBlue Airways and Spirit Airlines, it was
revealed Monday that JetBlue tried to buy Alaska
Airlines.
Whether it has a significant impact on the trial remains to
be seen, but at the very least, it confirms JetBlue’s growth strategy through
acquisition.
In fact, JetBlue CEO Robin Hayes testified that JetBlue did
indeed look to merge with several other smaller airlines as it looked to
compete with American, Delta, United and Southwest. Together, those four
airlines control about 80 percent of the airline market.
As recently as 2015, JetBlue tried to buy Virgin America but
was outbid by Alaska Airlines. JetBlue paid $3.8 billion to merge with Spirit
Airlines last year in a deal that is currently under scrutiny by the Department
of Justice.
Some observers think JetBlue might have overpaid in its
battle with Frontier to merge with Spirit.
Although it was rebuffed from buying Virgin America, JetBlue
never abandoned its acquisition strategy. The airline had its eye on two other
carriers in 2017, one of which was Spirit, but the other carrier was redacted
in court documents.
At the time, the plan was put on the shelf because the
purchase price of Spirit was too expensive. But JetBlue called on Spirit in
2019 in a deal dubbed "Project Exchange." Hayes saw it as an
opportunity to challenge the Big Four airlines.
If this deal is approved, Hayes said he doesn’t see any
further acquisitions, primarily due to the possibility of regulatory denial.
Spirit’s testimony last week that it held the same view
about acquisition being the only way to compete with the Big Four could also be
a relevant factor.
No matter what the outcome is, the trial is expected to have
a profound impact
on aviation.
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore