A top Spirit Airlines executive said the company initially viewed a $3.8-billion takeover offer from JetBlue Airways as a bid to eliminate a low-cost rival, the same conclusion reached by U.S. regulators now trying to block the deal. It appeared Spirit’s low-fare business model would be eliminated under JetBlue, Spirit Chief Executive Ted Christie told a federal judge Tuesday in Boston on the first day of trial testimony in the antitrust lawsuit brought by the U.S. Justice Department.
The so-called “Spirit effect” on routes reflects the 20% average drop in fares from all carriers on routes where the company competes, Markel said. It’s unlikely other ultra-low-cost carriers would step in to replace Spirit, which accounts for about half of that market, she said. “The loss of Spirit would result in roughly a billion dollars of net harm, year after year, for millions of passengers who fly over 100 routes throughout the country,” she said.
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