I recently wrote about potential overlap between the new JetBlue/Spirit combo and the Big Four airlines, but that is a messy comparison since routes are likely to change significantly if the deal goes through. In its merger announcement, JetBlue got more specific about what it really wants to get in this deal, and growing its focus cities is a big part of that.
In the acquisition announcement, JetBlue said this:
The acquisition will increase relevance for JetBlue in certain key focus cities (Fort Lauderdale, Orlando, San Juan, and Los Angeles) as well as Big Four airline hubs (Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami).
If we take that at face value, it means JetBlue isn’t really able to become relevant on its own — or not relevant enough for its liking — but somehow Spirit will push it over the top. Today, I’ll start by looking at the four focus cities where it wants more than it has today. Tomorrow, I’ll look at the “Big Four airline hubs.”
To do this, I pulled Cirium scheduled seats departing each airport for July 2022. Looking back, this may not have been the best metric since seat share will shrink as JetBlue removes seats from Spirit aircraft. But I was so far down the path before having that revelation that I decided it would directionally still be useful to look at it this way.
We’ll start in the most concerning airport for regulators outside the Northeast, and that’s Fort Lauderdale… home base to Spirit and site of a new terminal project for JetBlue.
Normally I’d look at this by metro area, to get a broader sense, but Miami is another airport where JetBlue wants to grow, and this is a particularly important market for the combined airlines, so we’ll look at it independently. You can see why the feds are concerned here. Spirit is a clear number one and JetBlue is a clear number two. Together, they are a VERY clear number one together with about 55 percent of seats in the market.
You might look at this and say, “Well, 55 percent… that ain’t bad, and these are both lower cost airlines.” Sure, but the issue is that it’s hard to get into Fort Lauderdale due to gate constraints. The airport is already committed to building a new Terminal 5 that will be exclusively for JetBlue use. To start it’s only 5 gates, but it can and will grow.
In this market, JetBlue does not need to grow to be relevant, but it will certainly have a commanding presence which it couldn’t get on its own. That sounds good… except I imagine that there will be divestiture required. And I’d imagine that Frontier would love to scoop all those up. Maybe Allegiant too. After all, with the main ULCC in the market wiped off the map, it creates so much opportunity for the others.
In Orlando, I looked at the metro area, including Sanford so that Allegiant’s presence wasn’t overlooked. And in this market, you have number six JetBlue taking on number two Spirit to leap over Southwest into the number one spot.
This is a market where you can imagine JetBlue will be glad to increase relevance further. It’s also an important base for the airline since it’s where it has its training facilities and other support services.
This July, JetBlue serves 21 destinations compared to Spirit’s 47. Of those, 12 are overlapping, primarily in the Northeast and Caribbean. Take a look at the map.
You can imagine JetBlue wants to come in here, bolster its Northeast flying, add a Midwest pattern, and then see where else it can deploy its airplanes. Of course, JetBlue is already poised to grow significantly. It is taking up 15 gates in the new South Terminal when it opens this fall.
Does Spirit add a lot? To me, this is as close as you can get to finding value in any market. This is a market where I see opportunity.
For San Juan, it’s hard to see how this is good news. JetBlue is already a clear number one, but Spirit is number two and an important source of low fares for people on the island. Presumably this gives soon-to-be number three Frontier blue skies ahead to grow, and that’s the only potential saving grace for the long-suffering residents on the island. Gate space really shouldn’t be an issue there, so Frontier will feast.
Saying that, I’m not sure what JetBlue really wants to do with a greater presence here that it couldn’t already do on its own. It’s just eliminating a competitor that can easily be backfilled.
We end today’s post with the last of the focus cities that JetBlue wants to grow, and it is a tough one. In LA — and I am just looking at LAX here — the two airlines are already similarly-sized and this combination will surge them into… fifth place, just ahead of Alaska.
Fifth place is not an enviable spot in this market, but Spirit and JetBlue both operate from Terminal 5 today so there probably are synergy opportunities that will allow further growth from better gate utilization.
My issue is… where does JetBlue grow? It has already abandoned most of the flying it had moved over from Long Beach. In July, the only markets that remain are 2x daily each to Las Vegas, Salt Lake City and San Francisco along with 4x weekly to Reno.
In its place, you find long, thin routes where JetBlue has tried to get a foothold like Charleston (SC), Hartford, and Jacksonville. Spirit adds service to a ton of places, but without that huge fare discount, it’s hard to see how JetBlue can really make a go of anything in LA… profitably.
That wraps up the four focus cities. Orlando I can see being appealing in some ways, but the others I don’t quite see the value. (Fort Lauderdale, I do, but I expect divestment.) Tomorrow, I’ll look at the Big Four airline hubs to see if that creates more opportunity.