JetBlue merger
11-04-2023, 03:58 AM
#431
Gets Weekends Off
Joined APC: Mar 2006
Position: guppy CA
Posts: 5,171
Firstly I'll state that I don't necessarily believe these arguments, but am attempting to put myself in the shoes of the DOJ attorneys. If I were them, this is how I would respond to your counter.
It is not predatory pricing for the legacy carriers to adjust their pricing in response to ULCC competition. In fact, that is the very basis of their argument that Spirit must not be allowed to merge with JetBlue because that will decrease competition, which will necessarily cause an increase in prices. That is how a market works.
As for JB/Spirit attorneys arguing that the DOJ is advocating predatory pricing: JB/Spirit are on trial, not the legacy carriers. Would it serve their clients' interests to concede in part to the government's case and argue to the judge that prices are definitely lower with Spirit in existence, and will surely rise with Spirit's demise, but that's okay because the legacies are engaging in predatory pricing (unproven)?
As for the going-concern argument, the government has already argued that is balderdash given the fact that Sprit has been one of the fastest growing airlines lately.
The remainder of the trial will be interesting.
It is not predatory pricing for the legacy carriers to adjust their pricing in response to ULCC competition. In fact, that is the very basis of their argument that Spirit must not be allowed to merge with JetBlue because that will decrease competition, which will necessarily cause an increase in prices. That is how a market works.
As for JB/Spirit attorneys arguing that the DOJ is advocating predatory pricing: JB/Spirit are on trial, not the legacy carriers. Would it serve their clients' interests to concede in part to the government's case and argue to the judge that prices are definitely lower with Spirit in existence, and will surely rise with Spirit's demise, but that's okay because the legacies are engaging in predatory pricing (unproven)?
As for the going-concern argument, the government has already argued that is balderdash given the fact that Sprit has been one of the fastest growing airlines lately.
The remainder of the trial will be interesting.
11-04-2023, 04:01 AM
#432
Gets Weekends Off
Joined APC: Mar 2006
Position: guppy CA
Posts: 5,171
11-04-2023, 07:13 AM
#433
Gets Weekends Off
Joined APC: Jun 2014
Position: A320 CA
Posts: 491
11-04-2023, 07:27 AM
#434
Perennial Reserve
Joined APC: Jan 2018
Posts: 12,114
11-04-2023, 08:14 AM
#435
SDQ Base Chief
Joined APC: Mar 2006
Position: 320 CA
Posts: 5,665
https://www.airliners.net/forum/view...9855#p24019855
11-05-2023, 12:37 PM
#436
Gets Weekends Off
Joined APC: Jul 2014
Posts: 805
The big 4 have upgauged the size of airplanes in and out of spirits main bases. 50 seat rjs have given way to 120+ seat 73 and bus types. The legacies will flood the market with one of their 300-500 737’s and if demand increases they throw a 738 or 739 on it to soak up the demand. The ULCC can’t do that. Limited fleet, limited extras, and they have become rigid with outsourced maintenance, ground crews, and station staff. Why would you work for spirit in Denver when United will hire you yesterday and now you have pass benefits that actually work. Spirit can’t compete for staff, JetBlue needs their order book, and you need to be a career destination for employees to stay. If the judge goes against the merger you let two anchors sink with no benefit to the consumer. They simply can’t compete. If they merge and start slinging 321’s on their bread and butter routes it will work. The judge wasn’t aware of the divestitures on day 3 or of the trial. They need to full court press their difficulties retaining talent and their divestitures to competition to the judge. I am about 75% sure this will go jetblues way I bought more with the dip this week.
11-05-2023, 01:00 PM
#437
Gets Weekends Off
Joined APC: Apr 2007
Position: A320
Posts: 1,316
The big 4 have upgauged the size of airplanes in and out of spirits main bases. 50 seat rjs have given way to 120+ seat 73 and bus types. The legacies will flood the market with one of their 300-500 737’s and if demand increases they throw a 738 or 739 on it to soak up the demand. The ULCC can’t do that. Limited fleet, limited extras, and they have become rigid with outsourced maintenance, ground crews, and station staff. Why would you work for spirit in Denver when United will hire you yesterday and now you have pass benefits that actually work. Spirit can’t compete for staff, JetBlue needs their order book, and you need to be a career destination for employees to stay. If the judge goes against the merger you let two anchors sink with no benefit to the consumer. They simply can’t compete. If they merge and start slinging 321’s on their bread and butter routes it will work. The judge wasn’t aware of the divestitures on day 3 or of the trial. They need to full court press their difficulties retaining talent and their divestitures to competition to the judge. I am about 75% sure this will go jetblues way I bought more with the dip this week.
I can’t help to have the stance, that this perspective was sorted or created to invoke judicial sympathy as a loop hole to the “hurdles” that were widely agreed upon in the past. It’s almost as if the ULCC model was intentionally sabotaged. The F9/NK would have possibly put some serious hurt on JB at the time. The hostile take over and the seemingly forced buyout agreement ended any progress in the ULCC model improving. For almost 2 years, NK has had to pretty much put all of its original plans on hold. All of the new city pairings and growth were sort of hindered by the unknown and mixed feelings towards the prospective merger result.
While it’s pretty obvious that NK has no future due to its rough financial shape, I’m not sold on the idea that - if the F9 merge or simply NK never having been approached by any potential buyer - that NK would be doing so poorly at this moment. I believe they’d have been forced to make it work long before all of the legacies really picked up speed.
Just my opinion and nothing more.
11-05-2023, 02:20 PM
#438
Gets Weekends Off
Joined APC: Dec 2022
Posts: 859
I can’t help to have the stance, that this perspective was sorted or created to invoke judicial sympathy as a loop hole to the “hurdles” that were widely agreed upon in the past. It’s almost as if the ULCC model was intentionally sabotaged. The F9/NK would have possibly put some serious hurt on JB at the time. The hostile take over and the seemingly forced buyout agreement ended any progress in the ULCC model improving. For almost 2 years, NK has had to pretty much put all of its original plans on hold. All of the new city pairings and growth were sort of hindered by the unknown and mixed feelings towards the prospective merger result.
While it’s pretty obvious that NK has no future due to its rough financial shape, I’m not sold on the idea that - if the F9 merge or simply NK never having been approached by any potential buyer - that NK would be doing so poorly at this moment. I believe they’d have been forced to make it work long before all of the legacies really picked up speed.
Just my opinion and nothing more.
While it’s pretty obvious that NK has no future due to its rough financial shape, I’m not sold on the idea that - if the F9 merge or simply NK never having been approached by any potential buyer - that NK would be doing so poorly at this moment. I believe they’d have been forced to make it work long before all of the legacies really picked up speed.
Just my opinion and nothing more.
spirit has been running like the merger isn’t happening. They haven’t put anything on hold. They are burning the furniture and trying to find revenue and profit in any possible place.
It may be just your opinion but it’s completely incorrect. The post above yours is more accurate.
11-05-2023, 03:58 PM
#439
Gets Weekends Off
Joined APC: Apr 2007
Position: A320
Posts: 1,316
spirit has been running like the merger isn’t happening. They haven’t put anything on hold. They are burning the furniture and trying to find revenue and profit in any possible place.
It may be just your opinion but it’s completely incorrect. The post above yours is more accurate.
It may be just your opinion but it’s completely incorrect. The post above yours is more accurate.
Lol. There we go again with the “what you’ve seen and or experienced that had led to formulating your opinion is meaningless, while I’m privey to something special and could only perceive the ultimate reality”. Guess there’s really no point to having a discussion because what you think is all that matters. Glad I was able to have experienced the most amazing contribution to a thread ever. Phew.
11-05-2023, 09:57 PM
#440
Line Holder
Joined APC: Apr 2021
Posts: 56
The big 4 have upgauged the size of airplanes in and out of spirits main bases. 50 seat rjs have given way to 120+ seat 73 and bus types. The legacies will flood the market with one of their 300-500 737’s and if demand increases they throw a 738 or 739 on it to soak up the demand. The ULCC can’t do that. Limited fleet, limited extras, and they have become rigid with outsourced maintenance, ground crews, and station staff. Why would you work for spirit in Denver when United will hire you yesterday and now you have pass benefits that actually work. Spirit can’t compete for staff, JetBlue needs their order book, and you need to be a career destination for employees to stay. If the judge goes against the merger you let two anchors sink with no benefit to the consumer. They simply can’t compete. If they merge and start slinging 321’s on their bread and butter routes it will work. The judge wasn’t aware of the divestitures on day 3 or of the trial. They need to full court press their difficulties retaining talent and their divestitures to competition to the judge. I am about 75% sure this will go jetblues way I bought more with the dip this week.
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