JetBlue has offered to buy Sprint Airlines challenging Spirit’s plan to merge with Frontier.
Christopher Anderson, professor of operations, technology, and information management at Cornell University, is an expert in the hospitality and airline industries. He says the Frontier-Spirit deal would be positive for both consumers and shareholders while the JetBlue-Spirit acquisition doesn’t offer the same operational synergies.
“The JetBlue-Spirit acquisition does not have the obvious synergies as the Frontier-Spirit counterpart. A Frontier/Spirit merger offers considerable operational synergies which, with the combined network would offer consumers more travel flexibility and most likely lower prices.
“JetBlue operates in different segment of air travel, while it launched as a low-cost (versus ultralow cost as Frontier/Spirit) it has continued to upgrade its service offerings over time. Spirit would connect JetBlue to new markets and expand its network, but at considerable incremental costs beyond the acquisition as the Spirit fleet would need to be upgraded and/or retrofitted to match JetBlue’s service delivery expectations.
“JetBlue’s all cash offer does not provide Spirit shareholders the upside of the Frontier’s cash/stock offer.”