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DLASFlyer
Topic Author
Posts: 448
Joined: Wed Jun 15, 2016 4:06 pm

JetBlue Makes Hostile Takeover Offer for Spirit

Mon May 16, 2022 9:29 am

Mods closing the last thread has inspired JetBlue to make a new offer for Spirit. $30 a share all cash, financed offer.

https://www.cnbc.com/2022/05/16/jetblue ... lines.html
 
CRJ5000
Posts: 172
Joined: Thu Jan 17, 2019 3:06 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 9:49 am

They’ve put a website together urging Spirit shareholders to vote against the Frontier acquisition.
https://jetblueoffersmore.com/
 
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BA744PHX
Posts: 680
Joined: Mon Sep 24, 2007 3:42 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 10:08 am

Talking about last act of desperation on B6, time to let it go….
 
codc10
Posts: 3428
Joined: Sat Jul 08, 2000 7:18 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 10:21 am

“Keep Spirit my Spirit”?
 
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BA744PHX
Posts: 680
Joined: Mon Sep 24, 2007 3:42 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 10:34 am

codc10 wrote:
“Keep Spirit my Spirit”?

Lol talking about TBT
 
sxf24
Posts: 1899
Joined: Wed Aug 15, 2007 12:22 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 11:22 am

CRJ5000 wrote:
They’ve put a website together urging Spirit shareholders to vote against the Frontier acquisition.
https://jetblueoffersmore.com/


Interesting quote on B6’s website, “ Fact: The outcome of the Northeast Alliance litigation is irrelevant for the regulatory approval of the Spirit transaction.” There are some points supporting, but I don’t think they’re particularly strong.

Letting SAVE shareholders decide is the right outcome, though I’m concerned that B6’s management will continue to be distracted from running an airline.
 
Mainland
Posts: 309
Joined: Mon Jun 14, 2004 3:17 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 11:37 am

Here’s the full press release from JetBlue.

https://www.businesswire.com/news/home/ ... 005393/en/
 
cloudboy
Posts: 1192
Joined: Mon Jan 26, 2004 12:38 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 11:43 am

Do you think they are desperate to get more space at FLL?
 
11C
Posts: 406
Joined: Mon Jun 17, 2019 2:25 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 12:01 pm

[threeid][/threeid]
BA744PHX wrote:
Talking about last act of desperation on B6, time to let it go….


I think the filing contains a lot of valid points. Time will tell, all of the prognosticating means little, but I realize that this site exists for that purpose, so let it fly.
 
NYCSKYGUY
Posts: 52
Joined: Mon Mar 19, 2018 9:12 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 12:16 pm

BA744PHX wrote:
Talking about last act of desperation on B6, time to let it go….


Why would B6 let it go when there's another avenue to take and their offer makes sense? Money talks. If I were a Spirit shareholder I'd want a better explanation about why they're turning down a clear premium with $ set aside in case the deal doesn't go through. As B6 management explains, clearly the Spirit board REALLY has something in mind for itself with the Fontier deal (board seats etc).
 
tphuang
Posts: 7121
Joined: Tue Mar 14, 2017 2:04 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 12:47 pm

I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.
 
Dalmd88
Posts: 3251
Joined: Fri Jul 28, 2000 3:19 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 12:49 pm

NYCSKYGUY wrote:
BA744PHX wrote:
Talking about last act of desperation on B6, time to let it go….


Why would B6 let it go when there's another avenue to take and their offer makes sense? Money talks. If I were a Spirit shareholder I'd want a better explanation about why they're turning down a clear premium with $ set aside in case the deal doesn't go through. As B6 management explains, clearly the Spirit board REALLY has something in mind for itself with the Fontier deal (board seats etc).

My take is the Spirt Board believes that the Frontier bid will go away if they accept the B6 bid. Then the B6 deal doesn't go through and they are left without a dance partner. It's not always about where the biggest payout is.
 
B764er
Posts: 155
Joined: Sat Feb 24, 2018 2:19 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:15 pm

NK probably holding out so b6 will offer $40 per share.
 
Runway765
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Joined: Sun Feb 07, 2021 1:21 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:27 pm

tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.
 
SoCalFlyer
Posts: 144
Joined: Fri Oct 10, 2014 12:16 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:30 pm

BA744PHX wrote:
Talking about last act of desperation on B6, time to let it go….


JetBlue is conducting business. Plain and simple. They do not have to let anything go until a decision is made by the owners of Spirit. Your calling it a “act of desperation “ is a bit of a stretch.
 
tphuang
Posts: 7121
Joined: Tue Mar 14, 2017 2:04 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:39 pm

Runway765 wrote:
tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


What does DOJ have anything to do with this? This is a proposal to NK shareholders.
 
trueblew
Posts: 419
Joined: Thu Nov 15, 2018 10:16 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:41 pm

Runway765 wrote:
tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


Frontier eliminating their largest competitor and gaining greater ability to raise their fares is far better for consumers?
 
sxf24
Posts: 1899
Joined: Wed Aug 15, 2007 12:22 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:41 pm

tphuang wrote:
Runway765 wrote:
tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


What does DOJ have anything to do with this? This is a proposal to NK shareholders.


DOJ reviews the merger and their assessment is highly relevant.
 
MIflyer12
Posts: 11169
Joined: Mon Feb 18, 2013 11:58 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:49 pm

tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


You're implying a breach of fiduciary duty by NK's BoD.

If B6 is so confident it can get the deal through while refusing DOJ's calls to change the NEA, let them fully compensate NK's shareholders for the risk of accepting B6's offer in the event the B6/NK deal is blocked. A reverse break-up fee of $500+ million ought to do it. It is unlikely the NEA trial is going to be quick, adding to regulatory uncertainty.
 
pmanni1
Posts: 500
Joined: Mon Oct 15, 2018 10:17 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:52 pm

trueblew wrote:
Runway765 wrote:
tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


Frontier eliminating their largest competitor and gaining greater ability to raise their fares is far better for consumers?

NK is an ultra low cost airline and B6 is not. Unlikely that in a merger B6 would want to or be able to lower their fares to Spirit's level.
 
Mainland
Posts: 309
Joined: Mon Jun 14, 2004 3:17 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 1:56 pm

Digging back to the old thread for this:

Mainland wrote:
So, all things remaining equal, I think there are three options for JetBlue as it comes to this vote...

1. Find a Spirit shareholder that wants the JetBlue offer so bad that it wages a proxy contest. Spirit shareholders would then get one set of proxy materials from the company, not unlike what they're preparing to send out, asking shareholders to support the deal. The dissident shareholder would send out a bunch of similar proxy materials asking shareholders to vote against the merger. Proxy contests are costly though. And to do one, you have to be a shareholder, but since we haven't heard public dissent from any Spirit shareholders this seems like a low likelihood outcome.

2. Spirit proceeds and sets a date to vote on the Frontier merger. JetBlue takes their case to Spirit shareholders by urging them to vote against the Frontier merger - a "vote no campaign". They really ramp up the public case for Spirit shareholders to turn down the Frontier deal to try and win over large institutions, and ma and pa shareholders, to vote against. Cheaper - but less bang for the buck of a proxy contest.

3. Launch a tender offer to buy up Spirit shares - another tactic to take their case direct to Spirit shareholders. Tender offers typically need around 30 days from announcement to completion (the "tendering" of shares). This isn't a slam dunk tactic itself. You might sway smaller retail shareholders, but to go this route you probably want to know you have good odds of getting at least 50 percent of Spirit shares outstanding to tender (and hopefully much more). If Sprit's larger shareholders don't feel compelled by the JetBlue offer, they're probably not likely to just tender their shares.

Of course, the other option outside of the vote is for JetBlue to make additional changes to its standing offer to quell Spirit's stated concerns.


Well - we have a #1 and #3 scenario. JetBlue formally filed its tender offer today and also filed a contested proxy to solicit vote against the merger. If you're a Spirit shareholder, you're about to get just absolutely bombarded with mail and/or calls from representatives of both sides of the deal. Spirit shareholders will be receiving "white" proxy cards from Spirit to vote FOR everything at the shareholder meeting, and JetBlue is about to send out "blue" proxy cards asking to vote AGAINST everything at the shareholder meeting. With only 25 days to go until the meeting, it should be quite a push to contact all shareholders.

I haven't gone through the tender offer filing in detail yet, and I'll add more if I find something interesting, but there's an interesting carrot and stick being applied here. It's a $30 cash per share offer, BUT with the potential to get closer to $33 if Frontier fully comes to the table. "If the Spirit Board decides to constructively engage with us, we will work towards a consensual transaction to acquire all of the outstanding Shares for $33.00 per Share in cash, subject to receiving the information to support the higher price."
 
CALMSP
Posts: 3834
Joined: Wed Aug 13, 2003 3:18 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 2:01 pm

cloudboy wrote:
Do you think they are desperate to get more space at FLL?


really has nothing to do with FLL. Its about eliminating a competitor in an attempt to raise prices/revenue. Thats what mergers are all about.
 
JoseSalazar
Posts: 759
Joined: Mon Oct 14, 2019 3:18 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 2:08 pm

CALMSP wrote:
cloudboy wrote:
Do you think they are desperate to get more space at FLL?


really has nothing to do with FLL. Its about eliminating a competitor in an attempt to raise prices/revenue. Thats what mergers are all about.

It’s a combination of offense and defense. Pilots and planes (and gates) are a limited resource right now. There is an offensive element to this (much faster growth and spreading the network westward, as well as significant FL growth), while getting 3k+ pilots and other employees, as well as the defensive aspect of preventing a very large ULCC destroy B6 in Florida/Caribbean.
 
fastmover
Posts: 609
Joined: Mon Mar 30, 2015 5:37 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 2:32 pm

trueblew wrote:
Runway765 wrote:
tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


Frontier eliminating their largest competitor and gaining greater ability to raise their fares is far better for consumers?



Thank you.
 
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Midwestindy
Posts: 6989
Joined: Sun Mar 12, 2017 3:56 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 2:34 pm

trueblew wrote:
Runway765 wrote:
tphuang wrote:
I think there is a lot of bad blood between B6 and NK BOD and this is also about ruining NK/F9 merger.

NK BOD clearly does not want to get merged with B6.


F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


Frontier eliminating their largest competitor and gaining greater ability to raise their fares is far better for consumers?


.......In this case yes
 
fastmover
Posts: 609
Joined: Mon Mar 30, 2015 5:37 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 2:42 pm

Midwestindy wrote:
trueblew wrote:
Runway765 wrote:

F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


Frontier eliminating their largest competitor and gaining greater ability to raise their fares is far better for consumers?


.......In this case yes


How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.
 
sxf24
Posts: 1899
Joined: Wed Aug 15, 2007 12:22 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 2:52 pm

fastmover wrote:
Midwestindy wrote:
trueblew wrote:

Frontier eliminating their largest competitor and gaining greater ability to raise their fares is far better for consumers?


.......In this case yes


How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


I think the F9/NK argument is there are limited markets where they overlap and when they do, their combined share is far less than other, higher cost airlines. Therefore, the only way for them to continue growing is to stimulate traffic and/or take share with lower fares.
 
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Midwestindy
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Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 2:54 pm

fastmover wrote:
Midwestindy wrote:
trueblew wrote:

Frontier eliminating their largest competitor and gaining greater ability to raise their fares is far better for consumers?


.......In this case yes


How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:
 
usflyer msp
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Joined: Tue May 23, 2000 11:50 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:07 pm

sxf24 wrote:
fastmover wrote:
Midwestindy wrote:

.......In this case yes


How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


I think the F9/NK argument is there are limited markets where they overlap and when they do, their combined share is far less than other, higher cost airlines. Therefore, the only way for them to continue growing is to stimulate traffic and/or take share with lower fares.


Plus it is pretty obvious that B6 plans on n dismantling large parts of NK's network, so many routes will be left with no ULCC service after a B6 merger.
 
fastmover
Posts: 609
Joined: Mon Mar 30, 2015 5:37 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:11 pm

Midwestindy wrote:
fastmover wrote:
Midwestindy wrote:

.......In this case yes


How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:



Ok let’s make up an example.

F9 and spirit both fly let’s say FLL to Tampa. They keep each other in check price wise. Spirit has 10% of the route F9 10%

They merge now 1 ulcc has 20% but got rid of the airline that checked it’s prices. Are you going to tell me they won’t raise prices? Come on.

But let’s say b6 F9 and Spirit all flew to Tampa B6 buying Spirt still leaves a ulcc
 
santi319
Posts: 1349
Joined: Thu Dec 29, 2005 3:24 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:14 pm

fastmover wrote:
Midwestindy wrote:
fastmover wrote:

How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:



Ok let’s make up an example.

F9 and spirit both fly let’s say FLL to Tampa. They keep each other in check price wise. Spirit has 10% of the route F9 10%

They merge now 1 ulcc has 20% but got rid of the airline that checked it’s prices. Are you going to tell me they won’t raise prices? Come on.


Exactly they are delusional, either way there is less competition. Perhaps with a B6/NK tie up we would be on the verge of a true full service carrier eventually with a massive network. I always thought the US having only 3 legacies was too little as opossed of the days they had 6….
 
fastmover
Posts: 609
Joined: Mon Mar 30, 2015 5:37 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:14 pm

usflyer msp wrote:
sxf24 wrote:
fastmover wrote:

How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


I think the F9/NK argument is there are limited markets where they overlap and when they do, their combined share is far less than other, higher cost airlines. Therefore, the only way for them to continue growing is to stimulate traffic and/or take share with lower fares.


Plus it is pretty obvious that B6 plans on n dismantling large parts of NK's network, so many routes will be left with no ULCC service after a B6 merger.



But that’s not true. It’s airliners.net wisdom that f9 wins either way. They get bigger or they fill in the gaps that JetBlue leaves right? That’s been the argument on here.
 
fastmover
Posts: 609
Joined: Mon Mar 30, 2015 5:37 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:17 pm

santi319 wrote:
fastmover wrote:
Midwestindy wrote:

It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:



Ok let’s make up an example.

F9 and spirit both fly let’s say FLL to Tampa. They keep each other in check price wise. Spirit has 10% of the route F9 10%

They merge now 1 ulcc has 20% but got rid of the airline that checked it’s prices. Are you going to tell me they won’t raise prices? Come on.


Exactly they are delusional, either way there is less competition. Perhaps with a B6/NK tie up we would be on the verge of a true full service carrier eventually with a massive network. I always thought the US having only 3 legacies was too little as opossed of the days they had 6….



Absolutely that’s the point of a merger. JetBlue wants to make its business model stronger and f9 wants to do the same. The difference is some here think only a ulcc model is acceptable. We know one thing when there were 6 major airlines there was definitely far more competition.

My only point is we can’t pretend that both mergers are not eliminating a competitor.
 
usflyer msp
Posts: 4665
Joined: Tue May 23, 2000 11:50 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:22 pm

fastmover wrote:
Midwestindy wrote:
fastmover wrote:

How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:



Ok let’s make up an example.

F9 and spirit both fly let’s say FLL to Tampa. They keep each other in check price wise. Spirit has 10% of the route F9 10%

They merge now 1 ulcc has 20% but got rid of the airline that checked it’s prices. Are you going to tell me they won’t raise prices? Come on.

But let’s say b6 F9 and Spirit all flew to Tampa B6 buying Spirt still leaves a ulcc


The point is that the pricing of NK/F9 with 20%, even if higher than present, will still be significantly less than that of a combined B6/NK with 50% (obviously this will vary by route) with B6's pricing model.
 
ty97
Posts: 686
Joined: Fri May 15, 2015 1:06 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:23 pm

ULCC = ultra low cost for the carrier, not the passengers. Whether an airline's internal cost structure is 'legacy', 'LCC', 'ULCC', etc is not relevant for competition. The average price paid by consumers is what is relevant. Are people getting, on average, cheaper transportation on Spirit than Jetblue? Possibly, I'd eve say probably, but the average ticket (+fees) prices would need to be compared to bear that out (something DOJ will almost certainly look at). Just saying 'well it's an ULCC' doesn't really mean anything.
 
santi319
Posts: 1349
Joined: Thu Dec 29, 2005 3:24 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:25 pm

There are some pretty serious allegations from Jetblue:


Ask yourself a simple question: why won’t the Spirit Board engage with us constructively?
The interests of Bill Franke’s Indigo Partners and the long-standing relationships between the two companies is the obvious answer.


Full text: https://jetblueoffersmore.com/wp-conten ... etBlue.pdf

This is what we all thought, but finally the accusation is there in the open. I would have assumed back door deals were illegal, but not too familiar with this practices.

One thing is for sure, someone is playing dirty..
 
VS11
Posts: 1828
Joined: Mon Jul 02, 2001 6:34 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:29 pm

Eliminating a competitor is not really a true argument here. All airlines essentially offer the Spirit/Frontier product as a basic economy fare - this has been going on for years. Just a random search BOS-FLL for Sat June 25 gives you:

Non-stops:
Spirit - $217
Delta - $234
jetBlue - $199

1-stop
United - $238
AA - $267

https://www.kayak.com/flights/BOS-FLL/2 ... stflight_a

Even without Spirit, there will be enough basic economy fare competition.
 
umichman
Posts: 350
Joined: Sun Apr 07, 2019 2:42 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:40 pm

fastmover wrote:
Midwestindy wrote:
fastmover wrote:

How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:



Ok let’s make up an example.

F9 and spirit both fly let’s say FLL to Tampa. They keep each other in check price wise. Spirit has 10% of the route F9 10%

They merge now 1 ulcc has 20% but got rid of the airline that checked it’s prices. Are you going to tell me they won’t raise prices? Come on.

But let’s say b6 F9 and Spirit all flew to Tampa B6 buying Spirt still leaves a ulcc


There are a significant number of historical precedents that the DOJ will largely be obliged to follow (as will a judge if it is contested and goes to trial). Any merger is going to have a certain amount of overlap and insisting that there must be zero overlap is unlikely to fly given past precedents. If the overlap is statistically similar to that allowed in previous mergers, they are going to have a hard time blocking the merger given that the combined airline will still be smaller than the big 4 carriers in US. Simply claiming that "it will raise prices" has never been the standard on which mergers have been blocked in the past and would be an extreme departure from precedents. Whether or not one believes that should be the standard as no real relevance on how this will be analyzed based on precedents.
Last edited by umichman on Mon May 16, 2022 3:42 pm, edited 1 time in total.
 
SoCalFlyer
Posts: 144
Joined: Fri Oct 10, 2014 12:16 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:40 pm

" If the Northeast Alliance is struck down, which will be decided long before the resolution of any challenge to the Spirit transaction, then by definition it will no longer be an obstacle" Jetblue makes a good point here. If the NEA is told it can't proceed, then this argument by Spirit is moot.
 
tphuang
Posts: 7121
Joined: Tue Mar 14, 2017 2:04 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:41 pm

sxf24 wrote:
tphuang wrote:
Runway765 wrote:

F9/NK is FAR better for consumers than B6/NK. We know the motives of B6 here, so I would absolutely deny B6/NK if I were the DOJ.


What does DOJ have anything to do with this? This is a proposal to NK shareholders.


DOJ reviews the merger and their assessment is highly relevant.


In this case, if shareholders don't like F9's offer, they can just reject it. DOJ's preference is not applicable. Shareholders will get a say in this matter.

People keep acting like this is just between F9 and B6. NK shareholders can just reject F9 proposal if they think NK BOD sold them out for cheap.
 
User avatar
Midwestindy
Posts: 6989
Joined: Sun Mar 12, 2017 3:56 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:47 pm

VS11 wrote:
Eliminating a competitor is not really a true argument here. All airlines essentially offer the Spirit/Frontier product as a basic economy fare - this has been going on for years. Just a random search BOS-FLL for Sat June 25 gives you:

Non-stops:
Spirit - $217
Delta - $234
jetBlue - $199

1-stop
United - $238
AA - $267

https://www.kayak.com/flights/BOS-FLL/2 ... stflight_a

Even without Spirit, there will be enough basic economy fare competition.


a) The fares on 1-2-3-4-5-e.t.c. routes does not determine the overall makeup of the market

b) You accidentally raised a valid counterargument:

Basic economy fares were introduced for the expressed intention to compete with NK (and other ULCCs).....
https://www.npr.org/2016/12/12/50501524 ... t-airlines

Why would airlines continue to offer fares on certain routes that were made to compete with ULCCs, if ULCCs no longer exist on those routes?
 
User avatar
Polot
Posts: 13311
Joined: Thu Jul 28, 2011 3:01 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 3:49 pm

tphuang wrote:
sxf24 wrote:
tphuang wrote:

What does DOJ have anything to do with this? This is a proposal to NK shareholders.


DOJ reviews the merger and their assessment is highly relevant.


In this case, if shareholders don't like F9's offer, they can just reject it. DOJ's preference is not applicable. Shareholders will get a say in this matter.

That’s the entire point of the June 10th meeting.

But DOJ matters in ALL bids. That is why B6 goes through the trouble of explaining why they think it will pass DOJ clearance. Because shareholders don’t get paid unless deal closes (ie, DOJ approves). It’s critical for determining how viable the offer is.

I can write offer of $40 a share for NK. Should NK shareholders take up that offer because $40>$30?
 
VS11
Posts: 1828
Joined: Mon Jul 02, 2001 6:34 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 4:00 pm

Midwestindy wrote:
VS11 wrote:
Eliminating a competitor is not really a true argument here. All airlines essentially offer the Spirit/Frontier product as a basic economy fare - this has been going on for years. Just a random search BOS-FLL for Sat June 25 gives you:

Non-stops:
Spirit - $217
Delta - $234
jetBlue - $199

1-stop
United - $238
AA - $267

https://www.kayak.com/flights/BOS-FLL/2 ... stflight_a

Even without Spirit, there will be enough basic economy fare competition.


a) The fares on 1-2-3-4-5-e.t.c. routes does not determine the overall makeup of the market

b) You accidentally raised a valid counterargument:

Basic economy fares were introduced for the expressed intention to compete with NK (and other ULCCs).....
https://www.npr.org/2016/12/12/50501524 ... t-airlines

Why would airlines continue to offer fares on certain routes that were made to compete with ULCCs, if ULCCs no longer exist on those routes?


Re: a). Sure. But the point was that basic economy is offered by all carriers. It is not going to go away.
b) Airlines will continue to offer it as there is obviously demand for it. I would guess it is a profitable fare bucket as most people do travel with bags and end up paying for bags and other perks. The basic fare is really just a way to lure people to travel. Once you lock them in with a ticket, it is almost a given they will end up spending more - bags and/or seats and/or food/drink on board.
 
Shanasta
Posts: 19
Joined: Tue Oct 23, 2018 9:16 pm

Re: JetBlue Makes Hostile Takeover Offer for Spirit

Mon May 16, 2022 4:02 pm

Just spit balling here, but do you think a B6/NK merger would have B6 continuing their cargo program?
 
User avatar
Midwestindy
Posts: 6989
Joined: Sun Mar 12, 2017 3:56 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 4:12 pm

santi319 wrote:
fastmover wrote:
Midwestindy wrote:

It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:



Ok let’s make up an example.

F9 and spirit both fly let’s say FLL to Tampa. They keep each other in check price wise. Spirit has 10% of the route F9 10%

They merge now 1 ulcc has 20% but got rid of the airline that checked it’s prices. Are you going to tell me they won’t raise prices? Come on.


Exactly they are delusional, either way there is less competition. Perhaps with a B6/NK tie up we would be on the verge of a true full service carrier eventually with a massive network. I always thought the US having only 3 legacies was too little as opossed of the days they had 6….


delusional?

No one is arguing that either merger doesn't mean less competition. B6 is quite simply much worse for competition.

fastmover wrote:
Ok let’s make up an example.

F9 and spirit both fly let’s say FLL to Tampa. They keep each other in check price wise. Spirit has 10% of the route F9 10%

They merge now 1 ulcc has 20% but got rid of the airline that checked it’s prices. Are you going to tell me they won’t raise prices? Come on.

But let’s say b6 F9 and Spirit all flew to Tampa B6 buying Spirt still leaves a ulcc


Let's try this one more time.

BOTH mergers have the potential to raise prices, one(B6) more than the other.

Let's explain using your example:

Essentially pre any merger- NK has 10% market share at $50, F9 has 10% market share at $50, B6 has 10% market share at $100, every other airline has 70% market share at $150.
$5+5+10+105 = $125 average fare in that scenario

Scenario 1 NK+F9 merger: 20% total market share, and let's even say the combined airline raises prices by 50%. So they control 20% of the market at $75, B6 has 10% market share still at $100, and every other carrier has 70% market share at $150.
$15+10+105 = $130 average fare in that scenario

Scenario 2 NK+B6 merger: 20% total market share, let's even say B6 keeps fares flat at $100, F9 has 10% market share and raises prices by 50%, every other airline has 70% market share at $150
$20+7.5+105 = $132.5 average fare in that scenario

It's a rudimentary example, but a B6 merger is still more damaging to consumers.
 
BEG2IAH
Posts: 1138
Joined: Thu Apr 22, 2004 3:42 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 4:15 pm

tphuang wrote:
What does DOJ have anything to do with this? This is a proposal to NK shareholders.


After everything that was written and explained in previous threads you still (pretend you) don't understand DoJ's role?!? Every merger will be reviewed and challenged by the DoJ's antitrust division. Shareholders may like whatever they want. Without the DoJ's blessing no aviation sector merger can happen. Period.
 
Vicenza
Posts: 774
Joined: Sun Apr 19, 2020 3:21 pm

Re: JetBlue Makes Hostile Takeover Offer for Spirit

Mon May 16, 2022 4:17 pm

DLASFlyer wrote:
Mods closing the last thread has inspired JetBlue to make a new offer for Spirit. $30 a share all cash, financed offer.

https://www.cnbc.com/2022/05/16/jetblue ... lines.html


Explain to me how any thread on a.net inspired JetBlue to make any new offer.
 
User avatar
Midwestindy
Posts: 6989
Joined: Sun Mar 12, 2017 3:56 am

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 4:19 pm

VS11 wrote:
Midwestindy wrote:
VS11 wrote:
Eliminating a competitor is not really a true argument here. All airlines essentially offer the Spirit/Frontier product as a basic economy fare - this has been going on for years. Just a random search BOS-FLL for Sat June 25 gives you:

Non-stops:
Spirit - $217
Delta - $234
jetBlue - $199

1-stop
United - $238
AA - $267

https://www.kayak.com/flights/BOS-FLL/2 ... stflight_a

Even without Spirit, there will be enough basic economy fare competition.


a) The fares on 1-2-3-4-5-e.t.c. routes does not determine the overall makeup of the market

b) You accidentally raised a valid counterargument:

Basic economy fares were introduced for the expressed intention to compete with NK (and other ULCCs).....
https://www.npr.org/2016/12/12/50501524 ... t-airlines

Why would airlines continue to offer fares on certain routes that were made to compete with ULCCs, if ULCCs no longer exist on those routes?


Re: a). Sure. But the point was that basic economy is offered by all carriers. It is not going to go away.
b) Airlines will continue to offer it as there is obviously demand for it. I would guess it is a profitable fare bucket as most people do travel with bags and end up paying for bags and other perks. The basic fare is really just a way to lure people to travel. Once you lock them in with a ticket, it is almost a given they will end up spending more - bags and/or seats and/or food/drink on board.


Yes they still might offer it, but would they offer it at the same fare level/price as if NK was in the market?
 
JoseSalazar
Posts: 759
Joined: Mon Oct 14, 2019 3:18 am

Re: JetBlue Makes Hostile Takeover Offer for Spirit

Mon May 16, 2022 4:23 pm

Shanasta wrote:
Just spit balling here, but do you think a B6/NK merger would have B6 continuing their cargo program?

What is the extent of B6’s current cargo program?
 
Brickell305
Posts: 1674
Joined: Sat Jun 24, 2017 2:07 pm

Re: JetBlue Makes New Offer for Spirit

Mon May 16, 2022 4:36 pm

Midwestindy wrote:
fastmover wrote:
Midwestindy wrote:

.......In this case yes


How? One ulcc is eliminating the other Ulcc. Why would they keep prices down if the direct competitor is gone (they won’t)

(Respectfully)
Let all be real the merger from either blue or f9 eliminates competition.


It's pretty simple, F9+NK keeps the same level of ULCC market share. NK+B6 eliminates millions of ULCC seats.

B6's counter argument to this is hilarious. They even brought up that Midwest Express is potentially restarting, so basically the ULCC market will be unchanged I guess :lol:

I'm not even sure how any of this is debatable.
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