A former government official says a merger between JetBlue Airways and Spirit Airlines would increase competition instead of stifling it as the Department of Justice believes.
A federal judge in Boston is now presiding over a trial to determine the fate of the merger.
Francisco Sanchez, a former U.S. undersecretary of Commerce and former U.S. assistant secretary of Transportation, argued in an op-ed piece that the combination of a JetBlue and Spirit collaboration would stimulate the airline business.
“The airline industry needs more competition,” he wrote. “… I feel strongly not only that the government’s position is wrong, but that it will ultimately end up hurting competition at a time when more is needed.”
JetBlue and Spirit say that a merger will help them compete with the Big Four and not create an antitrust situation, a theory that Sanchez supports.
“If the U.S. government wants to drive change in prices and standards, the airline industry overall needs a more level playing field,” he wrote. “The merged company would be a stronger competitor against the big four carriers even though it would still be less than half the size of any of the larger carriers. We would also have a competitor that has consistently offered the traveling public good travel options and decent jobs for its employees. … This merger makes sense not only from the perspective of competition but — just as importantly — from the standpoint of workers. All three major unions now support the merger. They know that it will help to transition thousands of contractors, particularly at Spirit Airlines, to full-time employment.”
Sanchez said he believes that the Biden administration thinks having Spirit as a separate and its own airline will drive other low-cost competitors to lower their fares.
But that is an unrealistic expectation, he wrote.
While Sanchez admitted that low-cost carriers charge a la carte fees for baggage and Wi-Fi access, for instance, they still don’t have enough capital to improve their fleets.
A merger would help that.
“During my time in government, my colleagues and I thought a lot about how to create conditions where companies could compete and thrive, while driving more value and fairness for consumers. While I believe the Biden administration has similar goals, their position on the Spirit/JetBlue merger will fail to bring more competition and better value for the traveling public,” Sanchez wrote. “American travelers will lose out if this deal gets blocked. They will be left with the same big four carriers. We need more competition across the airline industry, not less. Let’s hope we get it.”
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
