Although a federal judge dashed his hopes for a merger with JetBlue Airways, Spirit Airlines’ chief commercial officer still believes that more airline consolidation will come.
In
fact, Matt Klein called
it inevitable.
He
said he still expects to see the United States aviation industry marked by
airline collaborations.
“Consolidation through acquisition and merger is part of the
history of the U.S. airline industry,” Klein told the Routes Americas 2024
conference in Bogota. “I would tell you that consumers have benefited from
consolidation."
"It's created a more stable environment," Klein continued. "It's created a more
stable industry.”
Less than two years ago, Spirit Airlines agreed to be acquired by JetBlue for $3.8 billion. However, the Department of Justice sued to block the deal, saying it would violate antitrust laws. In January, a federal judge agreed with the DOJ, and for all intents and purposes, the merger was off.
Over the last two decades, the industry has seen mergers between Delta and Northwest, United and Continental, and American and USAir. Currently, Hawaiian Airlines is trying to merge with Alaska Airlines, but this is pending regulatory approval.
Klein said, “It's hard for me as an airline executive to say that
consolidation has been bad. In fact, what we were attempting to do [by merging
with JetBlue] was to create another competitor, a large competitor that could
compete with the airlines that have been permitted to consolidate. The
government thought differently...I believe consolidation will happen again. In
my opinion, it almost has to happen again at some point in the future."
Despite the DOJ’s current negative view of airline consolidation and the perception that the Biden administration is against big business, Klein said mergers “will occur because it makes sense. And to me, the business sense will overcome the fear out there that there’s been too much consolidation already.”
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