JetBlue disagreed with that conclusion and stated it might additionally pre-emptively divest from sure airports to handle regulatory issues. Frontier has not agreed to comparable concessions nor has it provided to pay a breakup price if the merger falls by means of over antitrust issues. JetBlue would pay Spirit $200 million if a deal failed for that cause.
“JetBlue offers more value — a significant premium in cash — more certainty and more benefits for all stakeholders,” the airline’s chief govt, Robin Hayes, stated in a letter to Spirit shareholders on Monday. “Frontier offers less value, more risk, no divestiture commitments and no reverse breakup fee.”
The proposed merger between Spirit and Frontier has additionally spurred issues. In March, a number of progressive lawmakers, together with Senators Elizabeth Warren, Democrat of Massachusetts, and Bernie Sanders, impartial of Vermont, expressed misgivings, warning that the merger might elevate ticket costs and hurt customer support. Last month, the Justice Department additionally despatched the 2 airways “second requests” for details about their merger, a process that effectively ties up the deal till the businesses reply the company’s lengthy listing of questions.
JetBlue stated Monday that Frontier and Spirit overlap on 104 nonstop routes, twice as many as shared between JetBlue and Spirit.
A Spirit-Frontier merger would mix two price range carriers with strengths on reverse coasts. JetBlue’s supply might speed up its plans to compete with the 4 massive U.S. carriers — American Airlines, Delta Air Lines, United Airlines and Southwest Airlines — which have a combined 66 percent share of the home market. A mixed Frontier and Spirit would management over 8 p.c of the market; JetBlue and Spirit collectively would command greater than 10 p.c.
JetBlue additionally accused Spirit’s administration of being blinded to the advantages of its supply by their relationship with Frontier’s management. Indigo Partners, a non-public fairness agency that invests in price range airways, owned a controlling curiosity in Spirit from 2006 to 2013, the identical yr it purchased Frontier.
After taking Frontier public final yr, Indigo has retained a controlling curiosity, and Bill Franke, a co-founder of Indigo, is Frontier’s chairman. Several members of Spirit’s board even have ties to Indigo, JetBlue stated.