In an attempt to derail a planned merger with Frontier Airlines, JetBlue threw a wrench into the process by submitting an unsolicited $3.6 billion acquisition offer to Spirit Airlines. JetBlue's offer to acquire its budget airline rival represents a 33% premium over Frontier's offer for Spirit.
A merger between Spirit and Frontier would make the combined company the country's fifth-largest airline, leapfrogging JetBlue in terms of size and capacity. JetBlue said that if Spirit accepts its higher offer, it will position the company to become a formidable challenger to the four largest carriers in the U.S., namely American, United, Delta, and Southwest.
Spirit has not formally accepted either offer, and the company said it still plans to work with its financial and legal advisors to evaluate the proposals. The company added that its decision would be made based on what would be the best course of action to take in the best interest of its stockholders.
Both Spirit and Frontier are ultra-low-cost carriers, with extremely low base rates and additional fees for just about anything else a traveler would want, including carry-on baggage. The two airlines rely on bargain-hunting leisure tourists far more than their larger competitors, and they transport far fewer corporate travelers. Because corporate travel has recovered considerably more slowly than leisure travel following the epidemic, Spirit and Frontier have recovered faster than their larger competitors.
In the last 25 years, mergers have changed the aviation sector in the United States. A series of mergers among ten airlines resulted in today's four major airlines. If either JetBlue or Frontier joins Spirit, it will be the first airline merger in the country since Alaska Air bought Virgin America in 2016.
Frontier defended its initial offer, stating that a merger between it and Spirit would make much more sense and generate larger annual savings for the company and consumers. Frontier added that a merger would create the country's "most competitive ultra-low fare airline," which would be beneficial for shareholders.
While consumers may like the inexpensive tickets offered by Spirit and Frontier, the airlines have received terrible customer satisfaction ratings over the past few years. According to U.S. Department of Transportation statistics, Spirit had by far the largest number of passenger complaints in 2021, with 11.5 complaints per 100,000 passengers.
JetBlue had the second-highest number of complaints, with 6.4, although this was down 43% from a year before. With 5.8, Frontier ranked third. Frontier had by far the highest complaint rate in 2020, with 49.3 complaints per 100,000 customers. The American Customer Satisfaction Index showed that Frontier and Spirit had received the poorest customer satisfaction ratings in the industry for 2021, while JetBlue tied for third.
