JetBlue explains Spirit Airlines merger to employees

In a letter to employees, JetBlue has outlined seven reasons for its proposed merger with Spirit Airlines. Read the letter on AirlineJobs.com News.

Combination would provide job growth and opportunities for crewmembers, a strengthened commitment to New York and Florida, and expanded reach of JetBlue’s sustainability efforts.

JetBlue today confirmed it has submitted a proposal to the Board of Directors of Spirit to acquire Spirit for $33 per share in cash, implying a fully diluted equity value of $3.6 billion and providing full and certain value to Spirit shareholders. The proposal represents a premium of 52% to Spirit’s undisturbed share price on February 4, 2022, and a premium of 50% to Spirit’s closing share price on April 4, 2022. JetBlue firmly believes its proposal constitutes a “superior proposal” under Spirit’s merger agreement with Frontier and represents the most attractive opportunity for Spirit’s shareholders.

The combination of the two airlines would position JetBlue as the most compelling national low-fare challenger to the four large dominant U.S. carriers by accelerating JetBlue’s growth and expanding the reach of the “JetBlue Effect,” which occurs when legacy carriers react to JetBlue’s unique combination of low fares and award-winning customer service. JetBlue triggers significantly greater fare decreases from legacy airlines when it enters a new market than when ultra-low-cost carriers enter a market.

“Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue has shown it’s possible to have both,” said Robin Hayes, JetBlue CEO. “When we grow and introduce our unique value proposition onto new routes, legacy carriers lower their fares and customers win with more choice. The combination of JetBlue and Spirit – coupled with the incredible benefits of our Northeast Alliance with American Airlines – would be a game changer in our ability to deliver superior value on a national scale to customers, crewmembers, communities, and shareholders. The transaction would accelerate our strategic growth and create sustained, long-term value for the stakeholders in both companies.”

In a letter to employees (published by Live and Let’s Fly) JetBlue has outlined seven reasons for its proposed merger with Spirit Airlines:

Dear Crewmembers –

Today we have big news to share with you that could possibly change the future of our airline. We have made an offer to buy Spirit and merge them into JetBlue. As you know, Frontier and Spirit have already announced their own merger agreement, but we’ve made an even better offer that would benefit Customers more than a Spirit-Frontier merger. Spirit is reviewing our proposal now and we believe their shareholders will expect them to seriously consider our offer.

We can all agree that Spirit has a very different brand and product than JetBlue, and so at first glance you may not think we’d make a great pair. However, when you dig deeper, you’ll realize we could be a perfect match. After all, our strong belief has always been that Customers shouldn’t have to choose between a low fare and a great experience, and JetBlue is the only airline that offers both. In the combined airline, JetBlue’s unique product and service at low fares would stay central to what we offer, and our current mission, values and culture would stay core to who we are.

We are so excited about all the benefits this combination would bring:

It would make JetBlue a stronger national competitor to the big airlines: The “Big Four” airlines have gotten so big they now control 80% of the market. A combined JetBlue and Spirit would make us a competitor on the national stage, allowing us to create a compelling alternative to the “Big Four” while also forcing the legacy carriers to lower their fares and improve service – what has been called the “JetBlue Effect” – for more Customers. The simple truth is no other airline shakes up the market and lowers legacy fares like JetBlue.

We would grow faster in Fort Lauderdale and Orlando: With Spirit’s presence in Florida, we can increase our relevance in two of our focus cities with even more flying. In FLL, we’d hit 170 daily flights, and we’d reach 130 in MCO.

This combination would complement our NEA growth in the Northeast: The NEA is a dream come true for JetBlue because it supercharges our growth in New York and Boston in large part by giving us access to American’s customer base and its slots and gates in JFK, LGA and Newark – where slots and gates for more growth are taken by other airlines. Buying Spirit supports our growth on a similar scale in Florida and allows us to diversify our Northeast-centric network.

We could grow in important BlueCities and add new destinations to our map: With Spirit, we could grow in our focus cities like Los Angeles, Fort Lauderdale, Orlando and San Juan, as well as in legacy hubs where the dominant carriers control with high fares, including Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta and Miami. Also, the combination would introduce JetBlue for the first time to a number of new destinations, including St. Louis, Memphis, Louisville, Atlantic City, Myrtle Beach and four additional destinations in Colombia.

Our Airbus fleet and our order book would get much bigger: Spirit has an all-Airbus fleet – a perfect fit for us. Our combined airline would have 455 aircraft, with another 312 Airbus aircraft on order. With Spirit’s fleet, we could grow faster than we otherwise would by buying more aircraft directly from Airbus.

We’d hire more Crewmembers and have more opportunity for career development: Together we would have 32,000 Crewmembers with many more on the way as we grew further. This means more jobs and lots of hiring, with career opportunities and pathways for growth for anyone working at JetBlue. In Florida, we’d have an incredible opportunity to boost our training and support centers in both Orlando and Fort Lauderdale with Spirit’s team currently working in these cities as well.

We would welcome Spirit’s team members into JetBlue and insource many roles: We think Spirit’s team members would love to work for JetBlue, with our unique culture, competitive opportunities and Crewmember-focused programs. We would look to insource some of the roles that Spirit currently has outsourced to business partners, especially in cities where we already have our own Crewmembers.

To be clear, our plan would be to acquire Spirit and merge it into JetBlue. The combined airline would fly under the JetBlue brand and be based in New York City. We would retrofit the fleet to a common JetBlue experience on all aircraft. That’s not to say we can’t learn from Spirit and incorporate things they do well into JetBlue. We would conduct a full review of Spirit’s product offering and Customer technology to bring together the best of both airlines.

In just 22 years, against all the odds, JetBlue has grown from a tiny airline into one of the most-loved brands in the U.S. We can certainly stay the course and be successful by growing on our own – especially given the NEA’s positive impact. While we are very confident in our current organic growth plan, the opportunity to merge another airline into ours doesn’t come along very often. This is a unique chance to build the only national airline where Customers don’t have to choose between great fares and great service – and so we’ve decided to make a very strong offer to Spirit.

We do not know yet how this process will turn out, and for now, everything at JetBlue stays the same. We wanted to be transparent with you about why we would consider buying another airline, and if we reach an agreement, we will let you know as soon as we are legally allowed to. Even then, it will take time to get regulatory approval and merge the airline under one operating certificate. There are still many unknowns and milestones before we reach the destination, and we’ll all need to have patience and focus as the process plays out. In the meantime, we can’t let this distract us from the work we are doing to prepare for a very busy summer and get our airline back on the runway to recovery.

We look forward to discussing this more with you on Thursday’s virtual pocket session.

Robin Hayes

Chief Executive Officer

Joanna Geraghty

President & Chief Operating Officer

Challenges the Dominant Carriers with Low Fares and Award-Winning Customer Service

In the 22 years since JetBlue first brought low fares to New York, airline mergers have created a landscape where the four largest U.S. carriers control more than 80 percent of the domestic market, to the detriment of consumers. The combination of JetBlue and Spirit would create the fifth largest domestic airline, better positioning it on a national level as a customer-centric, low-fare alternative to the dominant “Big Four” airlines.

“While JetBlue and Spirit are different in many ways, we also have much in common, including a focus on keeping our costs low so we can profitably expand and offer an attractive alternative to the dominant ‘Big Four’ airlines. We would conduct a full review of Spirit’s product offering, operational and customer technology, and talent pool to optimize the combined airline,” said Hayes.

JetBlue’s expanded presence is already significantly benefitting the community, with plans to hire 5,000 new crewmembers in the New York-New Jersey region this year and offering travelers in and out of the New York and Boston areas more choices, low fares, and JetBlue’s award-winning experience. The combination with Spirit would complement the NEA’s positive impact in the Northeast by similarly expanding JetBlue’s presence nationwide.

Offers Crewmembers Greater Opportunities Supported by JetBlue’s Differentiated Culture

JetBlue’s differentiated culture has made it a leading place to work since its first flight in 2000. Supported by JetBlue’s mission to Inspire Humanity and its values-based culture, the combined airline would have 32,000 crewmembers with plans to hire more as the airline grows.

By bringing together the power of the JetBlue and Spirit teams, with their shared commitment to customers and innovation, the combination would strengthen JetBlue’s ability to grow, deliver outstanding service, and compete in a domestic market dominated by the four largest airlines. A larger, financially stronger JetBlue would provide current and future crewmembers with more career growth opportunities, broader travel benefits, more opportunities to make a bigger difference in the communities JetBlue and Spirit serve, and a deeper bench of intellectual capital to support the future growth of the airline.

JetBlue is committed to working with labor leaders representing crewmembers and team members at both airlines to ensure the combination supports the needs of those that operate the airline, especially as Spirit team members join JetBlue. JetBlue intends to continue having direct crewmembers in places where it has them today and would insource Spirit roles in those cities. In locations where JetBlue does not currently insource, it would plan to conduct a full review to evaluate Spirit’s staffing model and determine the optimal path forward for the combined company.