JetBlue swayed by low spirit fares before seeking to buy rival

JetBlue Airways was competing aggressively with Spirit Airlines Inc. and other discount carriers on ticket prices before making a $3.8b takeover bid last year for its smaller rival, a JetBlue executive testified during the government’s case seeking to block the deal. Dave Clark, JetBlue’s head of revenue and planning, told a federal judge in Boston on Thursday that Spirit was growing rapidly in the years before the pandemic and expanding in the same markets, prompting JetBlue to consider other ways of responding. The government showed internal emails by Clark and presentations he gave to other executives showing the airline had a difficult time in 2020 winning business from price-sensitive customers. That forced JetBlue to match Spirit’s pricing. “At that time, we needed to,” Clark testified. JetBlue speculated it would be overtaken in market share by Spirit by 2025, according to an internal presentation Clark gave that was displayed in court by government lawyers. But during his testimony Thursday, Clark said JetBlue doesn’t consider Spirit one of its primary competitors. Instead, he said, JetBlue spends “99% of our time thinking about the Big Four” – American Airlines Group Inc., Delta Air Lines Inc., United Airlines Holdings Inc. and Southwest Airlines Co. Those companies account for 80% of US ticket revenue. Spirit remains “a competitor of ours, but they are roughly a 5% player, and that’s frankly the amount of mind share we spend on them,” Clark testified.<br/>