Allegiant would benefit from JetBlue-Spirit merger

JetBlue will transfer the holdings of Spirit Airlines in Boston and Newark to ultralow-cost carrier Allegiant Air should its $3.8 billion merger with Spirit go through. 

JetBlue has also reached an agreement to turn over up to five gates at Fort Lauderdale-Hollywood International Airport to Allegiant if it acquires Spirit. 

The deals would preserve ultralow-cost carrier service in those airports, including capacity-constrained Newark, which is a concern of antitrust regulators at the Justice Department. It would also hold JetBlue’s market share in check in Boston, where it is a leading carrier, and in Fort Lauderdale, where JetBlue and Spirit have a combined 47% market share, according to the Bureau of Transportation Statistics.

With the arrangement, JetBlue is making good on earlier commitments to divest of all Spirit’s gates in the New York area and Boston in the case of a merger and to relinquish some of its gates in Fort Lauderdale to an ultralow-cost competitor. The carrier previously agreed to turn over Spirit’s six gates at New York LaGuardia and its 22 daily landing and departure slots at the airport to Frontier. 

The Allegiant deal comes ahead of the scheduled Oct. 16 start of the antitrust trial in which the Justice Department will seek to block the JetBlue-Spirit merger as anticompetitive.

“Our divestiture commitment, while not needed to ensure the continued growth of the vibrant ultralow-cost carrier segment, is aimed at removing any doubt of our commitment to promoting competition,” JetBlue CEO Robin Hayes said Monday. 

For Allegiant, the deal could lead to a significant expansion in Boston, where it currently flies just four routes, and in Newark, where it flies just five routes. Under its terms, Allegiant would take control of Spirit’s two Boston gates and its 43 daily takeoff and landing authorizations in Newark. 

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In leisure-centric Fort Lauderdale, meanwhile, Allegiant currently flies 10 routes, but would be poised for a significant increase. 

“We are committed to long-term growth, especially in areas such as New York, Boston and Florida,” Allegiant chief revenue officer Drew Well said. “This agreement will allow us to expand our service in these cities and ensure that customers have even more access to affordable, nonstop flights for their travel needs.”

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