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on the fly: Analyzing a key route in the JetBlue and Spirit Merger – Hartford to Orlando

March 9, 2023

Hartford to Orlando – a closer look at a cherry-picked route in the JetBlue and Spirit Merger.

Analytics on the fly

on the fly: Analyzing a key route in the JetBlue and Spirit Merger – Hartford to Orlando


The US Department of Justice sued JetBlue to block its acquisition of Spirit. The complaint itself is required reading for antitrust or airline economics aficionados. In these kinds of lawsuits, the lawyers and staff of the Department of Justice must describe in plain English the antitrust issues they see with the proposed merger. Accordingly, the complaint makes plain that the DOJ, Spirit (and tellingly, JetBlue, through historical statements by executives), believe Spirit’s exit from the market will have the effect of higher fares.

Over the course of developments with this proposed acquisition, Cirium (and in support of many airline journalists) have used Cirium’s DIIO Schedules tool and FM Traffic module to analyze the competition in the market between the carriers, and with other carriers such as Southwest and Frontier.

Between JetBlue and Spirit, the airlines fly around 650 city-pairs, for which they overlap around 11%.

One such overlapping route is Hartford, Connecticut to Orlando, Florida. This is a sweet spot route for each airline — a Northeast mid-sized city in Hartford, to Orlando, the home of Disney. The suit itself references this prime leisure route on a couple of occasions.

Cirium has fare and passenger share data available to 2014. In 2014, JetBlue and Southwest Airlines each operated on the route, with Southwest holding 60% market share, and JetBlue 30%. Southwest’s fare was $121 and JetBlue’s was $144. These are non-directional average fares, not including taxes and fees.

When Spirit entered the route in 2017, it took 8% of the market, on fares of $50. This has grown to about 25% of the market in 2022, and the route market shares are today split between JetBlue (29%), Southwest (25%), Spirit (25%) and Frontier (13%).

The average one-way fare on the route in 2022 was $128, not including taxes and fees. JetBlue’s fare was above the average, at $158, and Spirit’s was quite a bit below the average, at $68. Spirit’s fare is 45% of JetBlue’s.

That said, Spirit’s fare — and what is reported in the FM Traffic module — is what is earned by the airline, excluding ancillary fees earned, taxes and other fees such as airport fees. That matters, because of how airlines bundle ancillary products such as carry-on bags. JetBlue allows one free carry-on for certain fare classes (with the basic fare not including a carryon). The price of carry-on bags on Spirit is variable — lowest at the time of booking — but around $60. If you add the price of a carry-on to Spirit’s fare, the fare to consumers is about $128. This matches the average fare across carriers in this market.

But tellingly, the fares have been stable since around 2018 across competitors on the route. Market share has been captured by Spirit, yes, but not from JetBlue alone.

Most of the market share has been given over by Southwest on this route. Then, consider that Frontier entered the market in 2020, during the pandemic. Excluding the last two pandemic-impacted years, in 2022 Frontier took 8% of the market — just like Spirit Airlines did when it entered in 2017.

How much could fares rise for this market if the proposed merger between JetBlue and Spirit were approved? The airlines probably could not raise fares more than marginally, given the presence of both Southwest and Frontier in this market, and the potential of new entrants.

Compare Southwest’s and JetBlue’s fares in 2014 (when Southwest dominated the market) to 2022. The fares are no different, despite the entry of Spirit and Frontier over time.

JetBlue planned to acquire Spirit and remove seats — literally. Capacity across the market would fall. A combined JetBlue and Spirit could control 50% of the market. But could they price fares that much higher? Likely not.

The DOJ has said: “Spirit’s own analyses found that, on average, industry-wide fares went down by 17% and the number of passengers increased by 30% when the airline started offering new service on a route.” We believe it. And yet, on this single, cherry-picked route, it appears fares have stayed stable, while market share has shifted.

NEXT ON THE FLY:   What are the busiest routes on the Transatlantic market?

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