JetBlue bids for Spirit Airlines
05-10-2022, 04:01 AM
#802
Gets Weekends Off
Joined APC: Feb 2011
Posts: 172
They won't block a merger that makes Jetblue #5. The NEA lawsuit ha no teeth, the NEA creates compition with Delta in NYC without it there is none. Spirit has little to no presences in the North East other than some random Flordia flights. Spirits Board and leadership are opposed to Jetblue becuase they loose control and $$.
05-10-2022, 04:27 AM
#803
Gets Weekends Off
Joined APC: Feb 2013
Position: CA
Posts: 1,218
They won't block a merger that makes Jetblue #5. The NEA lawsuit ha no teeth, the NEA creates compition with Delta in NYC without it there is none. Spirit has little to no presences in the North East other than some random Flordia flights. Spirits Board and leadership are opposed to Jetblue becuase they loose control and $$.
05-10-2022, 06:21 AM
#808
The REAL Bluedriver
Joined APC: Sep 2011
Position: Airbus Capt
Posts: 6,905
As for the NEA and Spirit, this is my simple opinion:
1. The NORTHEAST ALLIANCE has a name, and it's named for a reason. On the other hand Spirit is small in the northeast, and JB had offered to divest some/most/all of Spirit's northeast gates/slots, if needed, to gain final approval. I don't see the NEA and Spirit having anything to do with one another.
2. JB may well be willing to give up the NEA, or parts of it for Spirit. But only if it has to in final DOJ negotiations. And maybe more importantly, we have an order of operations problem.
They can't say they will give up the NEA publicly during negotiations, because they may not get Spirit in the final negotiations, and in that case they would have damaged or lost the NEA, and still not have Spirit. Same with giving up the NEA to get Spirit prior to final DOJ approval. They could give up the NEA to get Spirit's BOD to approve, but the DOJ could block the merger, and again, JB would have lost both the NEA and Spirit. And per my first comment, they may not have to give up either.
3. Contrary to popular misinformation, the NEA itself is pro-competitive. It's true that it's a cooperation agreement between JB and AA in the northeast, but unlike most agreements of this type, the purpose isn't to gain leverage over the consumer to raise prices, but to create a 3rd viable alternative to DL and UAL who have extremely high concentrations of market share/slots on each respective sides of the river. So it's overall philosophy is to add a 3rd VIABLE competitor, which is pro-competitive, but let's look at how it does that to test whether it lives up to that promise.
At it's core, the NEA is a transfer of much/most of AA's domestic flights/gates/slots from a high cost AA to a low cost JB. That is absolutely pro-competitive. In exchange, AA is able to add long haul flights due to the extra feed. Those long haul flights are of course on AA, but they are additional long haul flights, which adds competition in those markets. It is more pro-competitive to have DL, UAL *AND* AA compete on any given international route than it is to have DL or DL and UAL do it alone.
4. The government allowed the big 4 to become the big 4, almost entirely through allowing mergers. JB and Spirit are now minnows swimming in an ocean full of sharks. To not allow two minnows to merge and become a sunfish in a ocean of sharks, for any reason, would be shameful.
If you read Spirit's infographic justifying their decision to go with Frontier, it's very clear they are emotional about this and it seems very personal, definitely not simply course of business. The Spirit BOD is promised 5 seats on the Frontier BOD after the merger, and I would bet a large sum we would see much of Spirit management at the new company, which I'm sure they have been assured of such, and is why we are seeing management featherbedding instead of true shareholder representation. However, I don't think this is over just yet.
These are my ramblings, they are worth what you paid for them.
05-10-2022, 06:28 AM
#809
Gets Weekends Off
Joined APC: Jul 2015
Posts: 353
No doubt we all have an opinion, and Spirit managements stated opinion I don't believe is genuine on this subject, I think they are using it as an excuse to take the merger that benefits them the most with post merger assignments and posts.
As for the NEA and Spirit, this is my simple opinion:
1. The NORTHEAST ALLIANCE has a name, and it's named for a reason. On the other hand Spirit is small in the northeast, and JB had offered to divest some/most/all of Spirit's northeast gates/slots, if needed, to gain final approval. I don't see the NEA and Spirit having anything to do with one another.
2. JB may well be willing to give up the NEA, or parts of it for Spirit. But only if it has to in final DOJ negotiations. And maybe more importantly, we have an order of operations problem.
They can't say they will give up the NEA publicly during negotiations, because they may not get Spirit in the final negotiations, and in that case they would have damaged or lost the NEA, and still not have Spirit. Same with giving up the NEA to get Spirit prior to final DOJ approval. They could give up the NEA to get Spirit's BOD to approve, but the DOJ could block the merger, and again, JB would have lost both the NEA and Spirit. And per my first comment, they may not have to give up either.
3. Contrary to popular misinformation, the NEA itself is pro-competitive. It's true that it's a cooperation agreement between JB and AA in the northeast, but unlike most agreements of this type, the purpose isn't to gain leverage over the consumer to raise prices, but to create a 3rd viable alternative to DL and UAL who have extremely high concentrations of market share/slots on each respective sides of the river. So it's overall philosophy is to add a 3rd VIABLE competitor, which is pro-competitive, but let's look at how it does that to test whether it lives up to that promise.
At it's core, the NEA is a transfer of much/most of AA's domestic flights/gates/slots from a high cost AA to a low cost JB. That is absolutely pro-competitive. In exchange, AA is able to add long haul flights due to the extra feed. Those long haul flights are of course on AA, but they are not additional long haul flights, which adds competition in those markets. It is more pro-competitive to have DL, UAL *AND* AA compete on any given international route than it is to have DL or DL and UAL do it alone.
4. The government allowed the big 4 to become the big 4, almost entirely through allowing mergers. JB and Spirit are now minnows swimming in an ocean full of sharks. To not allow two minnows to merge and become a sunfish in a ocean of sharks, for any reason, would be shameful.
If you read Spirit's infographic justifying their decision to go with Frontier, it's very clear they are emotional about this and it seems very personal, definitely not simply course of business. The Spirit BOD is promised 5 seats on the Frontier BOD after the merger, and I would bet a large sum we would see much of Spirit management at the new company, which I'm sure they have been assured of such, and is why we are seeing management featherbedding instead of true shareholder representation. However, I don't think this is over just yet.
These are my ramblings, they are worth what you paid for them.
As for the NEA and Spirit, this is my simple opinion:
1. The NORTHEAST ALLIANCE has a name, and it's named for a reason. On the other hand Spirit is small in the northeast, and JB had offered to divest some/most/all of Spirit's northeast gates/slots, if needed, to gain final approval. I don't see the NEA and Spirit having anything to do with one another.
2. JB may well be willing to give up the NEA, or parts of it for Spirit. But only if it has to in final DOJ negotiations. And maybe more importantly, we have an order of operations problem.
They can't say they will give up the NEA publicly during negotiations, because they may not get Spirit in the final negotiations, and in that case they would have damaged or lost the NEA, and still not have Spirit. Same with giving up the NEA to get Spirit prior to final DOJ approval. They could give up the NEA to get Spirit's BOD to approve, but the DOJ could block the merger, and again, JB would have lost both the NEA and Spirit. And per my first comment, they may not have to give up either.
3. Contrary to popular misinformation, the NEA itself is pro-competitive. It's true that it's a cooperation agreement between JB and AA in the northeast, but unlike most agreements of this type, the purpose isn't to gain leverage over the consumer to raise prices, but to create a 3rd viable alternative to DL and UAL who have extremely high concentrations of market share/slots on each respective sides of the river. So it's overall philosophy is to add a 3rd VIABLE competitor, which is pro-competitive, but let's look at how it does that to test whether it lives up to that promise.
At it's core, the NEA is a transfer of much/most of AA's domestic flights/gates/slots from a high cost AA to a low cost JB. That is absolutely pro-competitive. In exchange, AA is able to add long haul flights due to the extra feed. Those long haul flights are of course on AA, but they are not additional long haul flights, which adds competition in those markets. It is more pro-competitive to have DL, UAL *AND* AA compete on any given international route than it is to have DL or DL and UAL do it alone.
4. The government allowed the big 4 to become the big 4, almost entirely through allowing mergers. JB and Spirit are now minnows swimming in an ocean full of sharks. To not allow two minnows to merge and become a sunfish in a ocean of sharks, for any reason, would be shameful.
If you read Spirit's infographic justifying their decision to go with Frontier, it's very clear they are emotional about this and it seems very personal, definitely not simply course of business. The Spirit BOD is promised 5 seats on the Frontier BOD after the merger, and I would bet a large sum we would see much of Spirit management at the new company, which I'm sure they have been assured of such, and is why we are seeing management featherbedding instead of true shareholder representation. However, I don't think this is over just yet.
These are my ramblings, they are worth what you paid for them.
Sent from my SM-G998U using Tapatalk
05-10-2022, 08:06 AM
#810
Gets Weekends Off
Joined APC: Mar 2006
Position: guppy CA
Posts: 5,171
And B6 doesn't have the money in cash to complete this transaction.
As for risk free, it is not a fairly risk free loan.
to quote Billy Joel-
“yesterday wasn’t all that good and tomorrow isn’t as bad as it seems.”
be a good long term investor. Make sure your asset allocation fits 80/20…. 70/30 etc depending on your age and risk tolerance.
it will all be okay, and the dollar cost averaging of your 401k will make you thankful there is a dip….. unless you are 65.
“yesterday wasn’t all that good and tomorrow isn’t as bad as it seems.”
be a good long term investor. Make sure your asset allocation fits 80/20…. 70/30 etc depending on your age and risk tolerance.
it will all be okay, and the dollar cost averaging of your 401k will make you thankful there is a dip….. unless you are 65.
And this time, the world's central banks are hampered by high inflation so I wouldn't look for a robust rescue from them.
The markets have a long way to fall in order to wring out speculative excesses. And crypto is one of those markets with massive speculation.
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