The airline industry is not vulnerable to outsiders like Uber and Lime, who have disrupted the transportation industry by flouting local regulations and asking for permission later. The arrival of ultra low-cost carriers like Spirit has led to innovation in pricing by unbundling each part of the journey and adding fees for assigned seats, luggage, overhead bins, printed tickets, and early boarding. This has made air travel more affordable for many people but has also made it uncomfortable for passengers. JetBlue’s CEO has promised that a JetBlue-Spirit combination will offer more comfort and better services at value prices, forming a more muscular network that can compete with Delta, Southwest, United, and American. However, the Department of Justice is arguing that a post-merger JetBlue cannot be as innovative as it claims it will be. JetBlue is buying assets to bulk up, and Spirit’s assets, including 190 Airbus A320 family jets and pilots to fly them, will allow JetBlue to grow faster, albeit at a high cost. JetBlue hopes to maintain its culture, but scaling or big acquisitions can make bringing one’s culture along difficult. Spirit will most likely disappear in a few years, which may not be a bad thing given its on-time record.
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