JetBlue expects to complete the merger with Spirit Airlines by the first half of 2024, the airline revealed in its Q1 2023 earnings release.
The New York John F. Kennedy International Airport (JFK)-based airline said it continued to expect the “Spirt acquisition to close no later than 1H24”, with customers benefiting “greatly from this pro-competitive transaction to create a national low-fare challenger to the current industry landscape”.
The United States (US) Department of Justice (DOJ) filed a lawsuit to block the proposed merger between the two airlines on March 7, 2023, where, alongside the Attorneys General of the Commonwealth of Massachusetts, the State of New York, and the District of Columbia, it argued that the merger would eliminate competition and further consolidate the airline industry in the US. The lawsuit claimed that the merger would result in increased fares, reduced choice, and raising costs “for the flying public and harming cost-conscious fliers most acutely”.
“As our complaint alleges, the merger of JetBlue and Spirit would result in higher fares and fewer choices for tens of millions of travelers, with the greatest impact felt by those who rely on what are known as ultra-low-cost carriers in order to fly,” said Merrick Garland, the US Attorney General.
In response, JetBlue’s Chief Executive Officer (CEO) Robin Hayes said that the company believed the DOJ had got it “wrong” and missed the point that the merger “will create a national low-fare, high-quality competitor to the Big Four carriers which – thanks to their own DOJ-approved mergers – control about 80% of the U.S. market”.
During the first three months of the year, JetBlue earned $2.3 billion in revenue, although operating expenses totaling $2.5 billion resulted in the airline finishing the quarter with a net loss of $192 million. Still, Hayes remained optimistic about the next few months, stating in the earnings release that the carrier sees “strong revenue growth to continue as demand remains robust and as we see continued momentum from our commercial initiatives”.
Hayes added: “We are forecasting a solidly profitable quarter, and we remain confident in our full-year earnings outlook.”
Meanwhile, according to the airline’s President and Chief Operating Officer (COO) Joanna Geraghty, demand remains robust in Q2 2023, particularly for “leisure and visiting-friends-and-relatives (VFR) travel particularly during peak periods”.
By the end of Q1 2023, JetBlue had a total of 290 aircraft and planned to take delivery of 11 Airbus A220, four Airbus A321neo, and four A321neoLR aircraft. In 2023, it plans to retire four A320 and six Embraer E190 aircraft, with that number growing to eight and 16, respectively, in 2024.