JetBlue-Spirit merger ‘would raise prices’
Spirit Airlines shareholders are set to vote tomorrow on whether or not to approve a proposed merger with ultra-low-cost competitor Frontier. Barry Biffle, Frontier’s CEO, sat down with USA TODAY on Wednesday to talk about the merger’s prospects and the issues plaguing the aviation industry this summer.
The deal is facing headwinds from a competing offer from JetBlue, and it’s unclear which will win investors’ favor. For now, shareholders are only voting on the Frontier proposal.
The interview has been edited for length and clarity and condensed.
How are you feeling going into the Spirit merger vote tomorrow?
Biffle: We feel really good. I mean, we’ve had really good momentum.
JetBlue started positioning after this plan was announced. What has that meant for the deal?
Biffle: These are completely different deals and have completely different odds of success from an antitrust perspective.
On one hand, you’ve got the Frontier-Spirit merger that lowers fares for consumers and gives more low fares to more people in more places. And on the other hand, the JetBlue alternative will actually raise prices for consumers. That’s why this is a nonstarter if you will, from a Department of Justice perspective.
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What does it mean for customers if your deal goes through?
Biffle: Our deal for consumers is actually fantastic.
When you look at airfares, this is going to provide more savings to people in more places and introduce more low fares in a lot of markets. Day one, we would introduce 300 new markets that would get access to low fares. Consumers really win with our deal. (You) take our schedule and (Spirit’s) schedule, without even optimizing the schedules; we fly from – I’m making this up – but we fly from Denver to Fort Lauderdale and they fly from Fort Lauderdale to Haiti and that creates a new connection. Today, there’s so many markets that are served on a connection basis. By adding them together, we create that many more connections. And you can buy these tickets today, but consumers would have to hunt and peck and they would just never find them.
People are concerned about disruption and so forth, and quite candidly, both Spirit and Frontier have been operating very well recently in contrast to many of the big airlines, but we could do even better with more scale and more recoverability. Consumers win with low fares and better service.
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Turning to the state of air travel this summer. What’s going on in the industry?
Biffle: Let me talk about Frontier and then we can talk about the industry because there are two different things going on.
We had a lot of challenges this spring, principally with air traffic control in Florida with Jacksonville Center. It was pretty well-documented: March and April were just really tough with Jacksonville Center.
We made changes to our schedule to alleviate and – to be candid – pull down our flying in and out of Florida to relieve some of the pressure so they can get staffed up. That’s really made a huge difference. If you look now at the month of June, we’re over 99% completion, which is higher than we were in 2019. So, we’re running a great airline right now. Really proud of team Frontier and what the employees are doing to deliver for our customers.
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That’s a big contrast to the rest of the industry. I can’t speak to the whole industry. I’m hearing about staffing challenges. I’m not sure what they are. I was on a United flight last night that was canceled. I’m not sure what’s going on because I can’t speak for them.
They’re probably going to go through what we did more than a year ago, because, we’re one of the few airlines, not only are we operating at 99% completion, we’re actually up versus 2019. We’re actually 12% bigger than 2019, we’re not smaller. We didn’t early retire people, we didn’t do hat tricks to buy people out, and so we’ve actually grown, not shrank. We’re much more on top of things and we’re ready to serve our customers. What’s exciting is we have really good completion and we’re delivering inexpensive, uneventful service for folks and that’s what they need right now.
What is Frontier doing this weekend and the rest of the summer to address the setbacks in the industry?
Biffle: We reduced our overall flying that traverses Jacksonville center. We took less of the airline and exposed it to where we believed there were staffing challenges. That’s made a big difference.
We literally have a daily meeting where we go through every component of our staffing: our direct staffing, our business partner staffing, we watch TSA lines at all the airports, and we’re constantly monitoring where are the challenges around the system. So that’s really paying dividends and I think it’s giving a lot of confidence to our employees and so forth. And so we’ve done a lot of things to make sure we’re staying on top of staffing challenges.
Further on the design side, we’re looking at the stuff that does fly through Jacksonville Center. We’re trying to make sure that a crew does not fly through there more than twice per day in a pairing. Back in March and April, we had a lot of pairings that went through Jacksonville Center three times. If you kept adding a delay each time that you go through there, two or three hours each time, just think about a shift. If you’re on a 10- or 12-hour shift you catch seven or eight hours on the back of it, you’re going to run out of time. By regulation, they can’t work that long.
Is that something the rest of the industry can emulate? How does the industry get out of, or recover, from the issues we’re seeing?
Biffle: Ultimately it’s inefficient. This costs money, so we’re doing this as a near-term mitigation. It’s not a long-term solution, it’s a Band-Aid until they can get staff and have no more challenges.
They may need to make some changes (to) the airspace, too. There’s way too much allocation given to space. Space launches shouldn’t block up the airspace as much as they do and for as long as they do. And then I think you’ve got to look at military and then you’ve also got to look at general aviation. Should we be canceling a flight from Islip to Palm Beach because somebody in a Citation jet, a family of four, clogs up the space? We end up having to cancel a flight because there’s no more routings through Jacksonville Center. Is that really fair? We may have to have a conversation about that at some point, about a fair way to allocate the airspace between the airlines and general aviation.
What advice do you have for travelers ahead of the holiday weekend?
Biffle: The truth is that broadly, across the travel industry, it doesn’t matter if you’re checking into your hotel, it doesn’t matter if you’re going to a restaurant, it doesn’t matter if you’re picking up a car, going through TSA, look: There’s more lines than there were, and there’s a lot of muscle memory that needs to be back in place for a lot of people across the service industry.
Just remember and be fortunate that we have these options and people are back, but be a little patient and you’ll get through it.
If you do have any kind of disruptions, make sure you’re looking at other options. Make sure you look at alternative airports. We still have a lot of seats ourselves in the month of July for sale and we’re proud of our completion and we’re also proud of our low prices. If you do have disruption, deal with it early and get ahead of it and look at other options. Make sure that you find a way to get there.
But I think overall, in the end, most everybody’s going to get to their destinations, they just may need a little more patience with some of the lines.
And the other thing: Cross your fingers weather’s good. Nothing we can do about weather.