JetBlue CEO targets big airlines over low-dare Spirit travelers

JetBlue Airways wants to use its acquisition of deep-discount carrier Spirit Airlines to compete with the four major airlines, with plans to rebrand Spirit jets and reduce their seats per plane by 10% to 15%, CEO Robin Hayes testified at an antitrust trial. JetBlue’s primary goal in spending $3.8b to buy Spirit was to go up against the likes of American Airlines Group Inc., Delta Air Lines Inc., United Airlines Holdings Inc. and Southwest Airlines Co., Hayes told a judge in Boston during a trial over the federal government’s bid to block the deal. “It is a very tall order to compete with them,” Hayes said Monday, his second day on the witness stand. The top four airlines account for about 80% of US ticket revenue. “We’ve spent 20 years now carving out 5%” of the market as a value-focused carrier, Hayes said. JetBlue has studied possible acquisitions of smaller airlines for years and determined it was the only way to compete with larger carriers. “You’d never, ever get to the size they are based on organic growth,” Hayes said of the big four companies. “Let’s recall that they didn’t get there through organic growth either — they got there through mergers and acquisitions.” The US Justice Department’s lawsuit challenging the JetBlue-Spirit merger is part of an ongoing effort by antitrust regulators to limit consolidation within the airline industry, after decades of approving deals with little restriction. Government lawyers say the transaction violates antitrust law because it would eliminate JetBlue’s fastest-growing competitor and limit choices for passengers, especially in the market for ultra-low-cost air travel. Hayes defended the deal, saying it was never intended to eliminate a potential rival.<br/>