JetBlue Launches Hostile Takeover of Spirit (theverge.com) 40
JetBlue launched a hostile takeover of Spirit Airlines after its earlier acquisition offer was rejected. The New York-based airline said in a release that its tender offer for $30-per-share was "all-cash" and "fully financed." From a report: Earlier this month, Spirit's board of directors rejected JetBlue's $32-a-share bid to acquire the airline in favor of an existing merger agreement with Frontier, one of its ultra-low-cost competitors. The board cited antitrust issues and "an unacceptable level of closing risk" to its shareholders as its reasons for rejecting the JetBlue bid. But JetBlue is still intent on acquiring Spirit, whether it wants to go ahead with the deal or not. The airline has said that absorbing Spirit would allow it to better compete with the "Big Four" carriers by increasing the size of its fleet and roster of trained pilots.
Good (Score:4, Insightful)
Jetblue is not as consumer friendly as it was when they started but they are still a better option than Spirit to be sure (in my opinion as a pretty regular business traveler still) and they are correct about needing to absorb a smaller player to compete against United/American/Delta/Southwest. Even by gate contracts alone a smaller airline can only expand so much without taking over another one. It's an industry that is always going to naturally consolidate.
Re:Good (Score:5, Funny)
Being shot out of a giant catapult into a cactus is a better option than Spirit.
Re:Good (Score:4, Funny)
But you can pay Spirit an extra $49 to be shot into cactus with less needles. It's how they keep prices so low, you have options.
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Also, it costs $54.99 extra now, and the cactus only has 5% fewer needles. And it is in Tucson.
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Being shot out of a giant catapult
This is the only way to fly! It is better for the environment as well. It is a shame the government keeps bailing out the airlines.
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I've had great luck with Sprit. I'm single and have a four day work week and a decent amount of disposable income, and I'll hop on a $75 round trip to a place Spirit flies for a fun weekend out with my camera maybe once a month. I've never had a flight delayed due to a maintenance issue or a problem I can attribute to Sprit generally, which is more than I can say for United, Delta or American Airlines.
Flying always kind of sucks, but on the other hand, I've only found that it sucks worse with more expensive
Re: Good (Score:2)
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I'm a touch under six feet tall and I just fly with a camera bag and a change of socks and underwear. If I need anything more I'll buy it when I get where I'm going.
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Re:Good (Score:5, Funny)
A valued member of the Borg collective.
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Some more than others but yes, economies of scale and capitalism in general will always advantage a larger company over a smaller one.
Where does that leave us? At least speaking for the US where I am we have a societal appeal to small businesses. Not because of any economic or logistical reason normally but really an emotional one. Small business entrepreneurship is a valued part of our culture. If we want to maintain that we should accept that they can only naturally compete so much and be willing to gr
If you believe in magic fairie (Score:2)
> Being upset that small businesses can't compete with the Amazons and Walmarts of the world but at the same time espousing how much the "free market" should decide and government should "get out of the way" are contradictory points of view.
If you believe in magic fairies, then for every things you wish was different, you'll wish that the magic fairy would fix it.
I don't believe that the Trump administration or the Biden administration are magic fairies. Therefore I can see something I don't like, I can
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To be clear I am not making a moral argument that we should do that but only to point out the natural flow of capital markets will eventually favor mergers, aqusitions and in theory on a long enough timeline, monopoly (because what market is more efficent than the winner of 100% marketshare?)
So if we want small businesses to stay in business and be competetive from a moral position, because we like them, then we probably have to accept a certain degree of interference in the markets to level the field somew
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It's entirely consistent for me to say "I wish Eva Mendes would ask me on a date", without also thinking that government should decide who you date.
Thinking "if X isn't perfect, it needs more government involvement" just means you think government is a magical fairy godmother that makes everything perfect. (Spoiler - neither Trump nor Nancy Pelosi is your godmother).
You can make the argument that the Trump administration or whomever would increase competition by ___ . Believing in the wisdom and benevolenc
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More concisely:
A. I see it would be nice if my paycheck were higher. ...
B. Getting President Trump/Biden/NextOne involved will probably make the situation worse
C. Therefore
That's perfectly valid. You'd definitely jump to "we should have more government involved!" if and only if you think everything the government touches turns to gold.
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Thinking "if X isn't perfect, it needs more government involvement" just means you think government is a magical fairy godmother that makes everything perfect. (Spoiler - neither Trump nor Nancy Pelosi is your godmother).
Not at all, but government (ie the public) does have the dictated monopoly use of force and several economic powers that private citizens and industries simply do not and cannot have. For me personally I favor the government involving itself heavily in inelastic markets and things i find morally necessary for society (utilities, healthcare, housing).
You've asserted that the "natural flow" is toward a) monopoly because b) that's most efficient. You've not pointed to any evidence that either is true. No evidence that all consumers have precisely the same values and will therefore all want to purchase the same product from the same company, creating a monopoly. It seems to me evidence is that some people prefer a Tesla, some prefer a Hinda, and some prefer an F-150.
Yeah preference exists but that's a micro-economic factor, I am talking about on a macro level. Generally there are lot's of factors that prevent a total mon
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> even the example of the SLS it is not entirely the beauracracy of NASA that caused that boondoggle but if Alabama doesn't vote in Richard Shelby term after term maybe things look different?
So you are able to see at least one instance of government officials fucking things up. If you look around, you'll see about 1,000 examples per day.
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Yes and I can see 1000's of examples of the "free market" fucking things up as well.
Markets are good for most things, especially luxury goods. For others, like the sectors I specifically called out, they are kinda terrible and don't work and are better at being under the control of the public. Recognizing that is part of understanding capitalism.
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What I was a toddler, K-Mart was wiping out chains like Caldors and Bradleys, and then we were told that K-Mart was a monopoly.
So how did Walmart happen, and why isnt Walmart bigger than Amazon?
The consolidation is not over broad sectors. They are over narrow sectors with adjacent alternatives, who come in and negate the K-Mart monopoly, then another adjacent negates Walmarts monopoly.
This isnt like th
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>This isnt like the railroads and local power generation. Those are actual monopolies.
Railroads were oligopoly, not monopoly--but that's almost as bad.
(Ok, so I'm an economics professor. Which leads to . . .)
Lubbock, TX, last I heard, still has two competing power grids.
Not surprisingly, about the lowest electric prices in the country.
In fact, economists have shown that in that region, you can actually *plot* electric price by distance from Lubbock.
The two grids overlap in a region. Each *could* expand
Re:Good (Score:4, Insightful)
I have concerns.
The "small" company culture can infect the "big" company.
Look at what happened with Boeing. After they "bought" the failing McDonnell Douglas, they replaced the management with McDonnell Douglas ones. (One really does not need hindsight to see where this is going). And today, without an engineer led organization, they literally killed hundreds of people with 737-MAX fiasco. And Boing's future is really uncertain.
If JetBlue are ready to fire Spirit management, probably including mid-level managers, yes, this could work. Otherwise it can also spectacularly backfire. (Bad management tends to spread much easily).
Re:Good (Score:4, Insightful)
This is very true and a valid concern.
The article does not mention specifics but JetBlue seems over the years to have pretty hands on management and leadership which has helped it's rise. I have a strong feeling they would not be willing to cede control.
Also since this is a "hostile" takeover whereas McD and Boeing was more of a traditional merger I doubt Jetblue feels they "need" the upper crust of Spirit. They'll get their payday and walk.
Time will tell though, things could go south long term.
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I can't speak to Jet Blue, having never flown them, but I HAVE flown both Spirit and Frontier. Short of their airplanes actually exploding mid-flight, I can't think of a worse experience than Spirit or Frontier. It was so bad that I have never, nor will I ever again, fly on those two airlines. Maybe Jet Blue can fix them. Couldn't be worse.
I see your Spirit and raise you Jetstar.
There are worse airlines than Spirit, the biggest issue with Spirit is the same with Ryanair and many budget airlines with bad reputations. Rather than the airline, it's the clientele. Having boarded a (COPA) flight in MDE at the same time as a Spirit flight to FLL... All I can say is that thank fuck I was travelling to PTY.
For the Americans playing along at home, you'll see the same kind of crowds in the UK boarding a Ryanair flight to Ibiza or in Oz, flying Je
Pilots (Score:5, Insightful)
More than anything else, they're probably interested in acquiring the pilots, which are in very short supply. Everything else is just a bonus.
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Presumably they'll take the "systems" Spirit uses to do what it does the way that it does it, and hurl them into the fires of Mount Doom?
(It was fun watching Delta try to integrate Northwest. NW had built a fancy data-driven CRM system that'd calculate passengers' expected future value as customers to decide who to upgrade, how many miles to give when apologizing for irregular ops, et cetera. Delta thought "ooh, shiny" and kept it. Then Delta changed some rules, like disallowing upgrades on mileage award
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More than anything else, they're probably interested in acquiring the pilots, which are in very short supply. Everything else is just a bonus.
And the aircraft, Spirit's fleet of A320 family aircraft would complement JetBlue's fleet of A320s. It's not that easy to get new one's these days as the 150-200 seat market has a load of demand and not a lot of supply with the trouble Boeings been having with the 737s.
Related: Severe pilot shortage in US (Score:2)
https://www.nbcnews.com/busine... [nbcnews.com]
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Logistics are easier (Score:2)
How to turn an airline in to a cesspool... (Score:1)
You can acquire Spirit for $30/share (Score:5, Funny)
.... but it's +$5/share if you also want to acquire the bathrooms, +$7/share if you want the branding rights, +$2/share for the crew...
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it's [...] -$7/share if you don't take the branding rights.
FTFY
But you couldn't pay me enough to take a brand with that reputation. And I've never flown Spirit. Surely I'd remember an experience like that?
So will this be a violent take over? (Score:2)
Given the reputations involved, "Hostile Takeover" made me think of a bar fight scene but in an airplane.
It needs to be asked. Why? (Score:2)