JetBlue has twisted itself in knots over the last couple months explaining why the Spirit acquisition makes sense for the airline, saying it will greatly increase competition and bring fares down. I find it hard to believe all these claims since JetBlue is by nature a higher fare airline than Spirit with a higher cost base. That isn’t going to change.
While fare comparisons are nearly impossible since JetBlue has few ancillaries and high fares while Spirit has high ancillaries and low fares — completely different structures — that doesn’t mean there isn’t other data that can help think about this further.
Today, I’m looking at route overlap versus the competition, though I have to start with a caveat. There is nothing suggesting that the combined route map today will look anything like what JetBlue will actually fly after the meger is complete. In fact, I’d be very surprised if it didn’t change dramatically. But, let’s look at what we have now anyway.
In the JetBlue press release announcing the merger, CEO Robin Hayes was quoted as saying this.
We believe we can uniquely be a solution to the lack of competition in the U.S. airline industry and the continued dominance of the Big Four. By enabling JetBlue to grow faster, we can go head-to-head with the legacies in more places to lower fares and improve service for everyone. Even combined with Spirit, JetBlue will still be significantly smaller than the Big Four, but we’ll be much better positioned to bring the proven JetBlue Effect to many more routes and locations.
Yes, by definition, stapling Spirit on to JetBlue would create more overlap with the legacies. But how much overlap? I pulled July 2022 schedule data from Cirium and put it into Great Circle Mapper to show how JetBlue and Spirit overlap with the Big Four — American, Delta, Southwest, and United. Let’s take a stroll, but one minor note… I left London off these maps to keep the scale better, but American and Delta both fly the same route to Heathrow that JetBlue flies.
Some of the greatest overlap comes with American, and that stands to reason. There is relatively large overlap in the northeast, and of course, there’s Florida. The combined airline does have a substantial presence where American flies, but it’s mostly east of the Mississippi.
The other big overlap is with Delta.
With Delta, the overlap with JetBlue is understandably in the northeast where they both have overlapping hubs. But with Spirit, there is some Atlanta added, and a little more in Florida and the West, but it’s pretty sparse outside the northeast.
It only gets thinner from here. Let’s look at United.
The overlap with United today is almost entirely at Newark where JetBlue has been struggling to build up a sustainable presence. Spirit adds some Houston and Chicago to the mix, but the combined route map overlap is very small. Lastly, we’ll look at Southwest.
Keep in mind that this is specifically looking at airport overlap, so if JetBlue serves O’Hare and Southwest serves Midway, it won’t show up. But this does tell you a great deal nonetheless. JetBlue today has nearly no overlap with Southwest. Spirit, however, has plenty. It’s almost all focused on Florida or Las Vegas. And the combined map, well, it reflects pretty much the same thing as Spirit alone.
So what does all this mean? Unfortunately, it doesn’t mean much for the reason I mentioned at the top of this post. The problem we have here is that JetBlue wants to bring Spirit into JetBlue. With a different model, it stands to reason that the Spirit route map can’t simply be stapled on to the JetBlue map as is.
The way I see it, JetBlue will keep high levels of service in Spirit’s biggest airports. It’s just that the lines on the map from those cities may go to different places. I’ll cover those airports in more detail in a future post.
What we can glean from this is that the new Spue (I’ll just keep trying new name combos until I find one I like) will have decent overlap in the Northeast and Florida. That’s not much different than was already the case. It is stretching into other parts of the country, but the overlap is still very limited overall.
Either way, it’s hard to see how JetBlue is hardly going to be a real competitor to the Big Four. It and Spirit are both point-to-point airlines. JetBlue in theory has the ability to connect passengers over its hubs, but it does very little of that. It doesn’t want to do that. So the idea that there will be a fifth big competitor seems like quite the stretch.