Bidding war for Spirit could undercut power of four big airlines

When the dust settled on a big round of airline consolidation nearly a decade ago, four large companies came to dominate the industry. A new merger scramble could challenge that cozy arrangement. A brewing fight over the future of the budget carrier Spirit Airlines may give rise to a credible, albeit still smaller, competitor to the industry’s giants. In February, Frontier Airlines and Spirit announced plans to merge, promising to create a national budget airline that would help keep fares low. JetBlue Airways this week made its own bid, of $3.6b, for Spirit, which said late Thursday night that it would consider the proposal. Whether Spirit ends up merging with Frontier or JetBlue, the combined company could pose a more formidable threat to the nation’s four largest airlines — American Airlines, Delta Air Lines, United Airlines and Southwest Airlines — which have a combined 66 percent share of the domestic market. The four operate in a league of their own, especially at their hub airports in cities like Atlanta, Dallas, Houston and Newark, where they each control a large share of gates and flights. In an illustration of the industry’s lopsided nature, Alaska Airlines, the fifth-largest carrier last year, controlled just 5 percent of the domestic air travel market, while United, the fourth biggest, had nearly 13%. A combined Frontier and Spirit would control over 8% of the market, and JetBlue and Spirit together would command more than 10%. “You’re facing American, United, Delta and Southwest with such enormous fleets and market penetration,” said Samuel Engel, a senior vice president and airline industry analyst at ICF, a consulting firm. “It is reasonable that a beefier No. 5 will make for a stronger competitor.”<br/>