Skip to content

Bad for travelers: Why I'd hate to see a Spirit and JetBlue merger

April 11 2022
4 min read
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

This viewpoint from TPG's founder Brian Kelly was first published in his weekly email.

Be the first to get his industry insights by signing up for the newsletter here.

What I love about the travel industry is that there’s never a dull moment. Every week something is happening, whether it’s passengers misbehaving, operational meltdowns or cool new route announcements.

Sign up for our daily newsletter

This week in mergers and acquisitions news, JetBlue Airways announced that it wants to acquire Spirit Airlines for $3.6 billion, all cash.

Say what?

Spirit and Frontier Airlines already announced plans in February to merge. JetBlue’s unsolicited offer certainly throws a wrench into those plans.

But I’m not convinced that they’ll call off their deal or that Spirit will merge with JetBlue, for a couple of different reasons.

Spirit and JetBlue are too different

JetBlue and Spirit have completely different business models: JetBlue focuses on more premium experiences, including free snacks, Wi-Fi and its Mint business-class product — which I love. Spirit is admittedly no-frills; that’s what people like about it. Spirit and Frontier are much more similar in their business models.

Then there is the issue of Florida. Spirit is based there and JetBlue has a huge presence in the Sunshine State and runs all of its crew training out of Orlando. That might be a major issue for the Department of Justice.

And we can’t forget that JetBlue is still full-steam ahead on its partnership with American Airlines, which has already received some question marks from regulators. So will the government actually approve the American partnership and the Spirit acquisition? My gut says no and that if JetBlue has to choose between its partnership with American and one with Spirit, it would definitely stick with American because it’s a more similarly aligned airline.

I think this is more about slowing down the Frontier deal and making it more costly. Frontier and Spirit will need to come up with better terms for their shareholders since this $3.6 billion deal from JetBlue looks really good on the surface.

Would this merger be good for consumers?

That’s the No. 1 question I’m being asked and simply put, my answer would be no.

If JetBlue acquires Spirit, you would have two wildly different experiences within one airline and nobody wants that. When Alaska Airlines bought Virgin America, the Virgin America brand that everyone loved so much quickly went away. And when Delta Air Lines acquired Northwest Airlines in 2008, the latter had a very robust frequent flyer program and a loyal audience. Although Delta’s inflight experience was better, consumers saw the value of their miles degrade over time.

In general, with less competition comes less of an incentive for airlines to offer consumer-friendly products and prices — though, to be fair, airfare hasn’t risen that dramatically in the United States over the last decade.

It seems like everybody likes to dis Spirit Airlines for one reason or another but it’s quite profitable and people like flying Spirit to save money. If JetBlue were to take over and the Spirit brand were to live on, the ultra-low-cost nature of Spirit would certainly be diluted. Now would that mean a better experience? Probably. But it would also likely mean higher fares as well and that’s not what Spirit’s frequent flyers are looking for. Spirit has a corner on the market because some people just want to go from point A to point B and don’t care about free Dunkin’ coffee.

It will be interesting to see how this plays out. My gut says that this merger won’t actually happen, but never say never.

Featured photo by AFP via Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

TPG featured card

Best Marriott card for Business Owners
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
3 / 5
Go to review

Rewards

2 - 6X points
6X6x points at hotels participating in the Marriott Bonvoy® program.
4X4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
2X2x points on all other eligible purchases.

Intro offer

Limited Time Offer: Earn 100,000 points75,000 points
Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.

Annual Fee

$125

Recommended Credit

670-850
Excellent/Good
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Marriott Bonvoy Business Amex is a stacked card with a rewards rate that will help you earn bonus points on everyday and business-related purchases. You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. Finally, the free night award certificate with a redemption level of 35,000 points or less can get you hundreds of dollars in potential value each year.

Pros

  • 6x points on eligible purchases at hotels participating in the Marriott Bonvoy program
  • 4x points at restaurants worldwide, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. shipping
  • 2x points on all other eligible purchases
  • Earn a free-night award each card renewal month (up to 35,000 points)
  • Receive 15 elite night credits to jump-start status
  • Transfer Marriott points to 40+ airlines

Cons

  • Airline points transfer ratios are poor
  • Must spend $60,000 in a year for second free-night award
  • Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.
  • 6x points at hotels participating in the Marriott Bonvoy® program.
  • 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
  • 2x points on all other eligible purchases.
  • Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
  • Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy® points) at hotels participating in Marriott Bonvoy®. Certain hotels have resort fees.
  • Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
  • Terms apply.
  • See Rates & Fees
Apply for Marriott Bonvoy Business® American Express® Card
at American Express's secure site
Terms & restrictions apply. See rates & fees
Best Marriott card for Business Owners
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
3 / 5
Go to review

Rewards Rate

6X6x points at hotels participating in the Marriott Bonvoy® program.
4X4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
2X2x points on all other eligible purchases.
  • Intro Offer
    Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.

    Limited Time Offer: Earn 100,000 points
    75,000 points
  • Annual Fee

    $125
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent/Good

Why We Chose It

The Marriott Bonvoy Business Amex is a stacked card with a rewards rate that will help you earn bonus points on everyday and business-related purchases. You'll earn 15 elite night credits each calendar year, and receive automatic Gold elite status. Finally, the free night award certificate with a redemption level of 35,000 points or less can get you hundreds of dollars in potential value each year.

Pros

  • 6x points on eligible purchases at hotels participating in the Marriott Bonvoy program
  • 4x points at restaurants worldwide, U.S. gas stations, wireless telephone services purchased directly from U.S. service providers and U.S. shipping
  • 2x points on all other eligible purchases
  • Earn a free-night award each card renewal month (up to 35,000 points)
  • Receive 15 elite night credits to jump-start status
  • Transfer Marriott points to 40+ airlines

Cons

  • Airline points transfer ratios are poor
  • Must spend $60,000 in a year for second free-night award
  • Limited Time Offer: Earn 100,000 Bonus Marriott Bonvoy Points after spending $4,000 in purchases on your new Card in your first 3 months of Card Membership. Offer expires 11/2/22.
  • 6x points at hotels participating in the Marriott Bonvoy® program.
  • 4x points for purchases made at restaurants worldwide, at U.S. gas stations, on wireless telephone services purchased directly from U.S. service providers and on U.S. purchases for shipping.
  • 2x points on all other eligible purchases.
  • Receive a 7% discount off standard rates for reservations of standard guest rooms at hotels that participate in the Marriott Bonvoy program when you book directly. Terms and Conditions Apply.
  • Receive 1 Free Night Award every year after your Card renewal month. Plus, earn an additional Free Night Award after you spend $60K in purchases on your Card in a calendar year. Awards can be used for one night (redemption level at or under 35,000 Marriott Bonvoy® points) at hotels participating in Marriott Bonvoy®. Certain hotels have resort fees.
  • Enjoy Complimentary Marriott Bonvoy Gold Elite Status with your Card.
  • Terms apply.
  • See Rates & Fees