The Department of Justice wanted to stop a merger attempt between JetBlue and Spirit Airlines for fear it would create a monopoly. Instead, helping to prevent such a merger ultimately was a small contributing factor in Spirit’s financial downfall.
Now the end result begs just one question: With Spirit Airlines filing bankruptcy, are budget carriers a thing of the past?
Sorry, nobody wants to talk about doomsday but the question had to be asked. The Big Four of American Airlines, Delta Air Lines, United Airlines and Southwest Airlines dominate the airline scene in this country. But there is a place for low-cost carriers.
Like Spirit.
And Allegiant, Breeze and Avelo.
Being able to have choices is what makes this country great, including airfares. There’s no doubt that Spirit is no frills. You either love it or you hate it; there’s no in-between. But from a price standpoint, it serves a purpose.
But budget airlines face a competition crisis.
And a fiscal one, for that matter.
To me, a budget airline competing against a major airline is like a mom-and-pop hardware store going up against The Home Depot. The latter might not necessarily do it better but they certainly have more options. This is the enigma for budget airlines. Don’t get me wrong: low-cost carriers have their place.
But the DOJ got it wrong when it came to JetBlue and Spirit. The department was so concerned about creating a monopoly and removing a competitor from the equation that it didn’t do its homework fully. It failed to realize that Spirit couldn’t stand on its own.
Perhaps a merger would have been beneficial to both airlines.
Too late now.
And one of them could go away forever.
I don’t think you will see small, low-cost carriers in the future. I think ultimately they will all be sucked up by the larger airlines, which will grow in stature, equipment and people. They will do for airlines what The Home Depot and Walmart have done over the years—slowly eliminate competition.
There is a place for budget airlines; it’s just a question of where it is.
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