Airlines are seeking buyouts to expand and bulk up amid the recovery
Airlines are expecting a recovery in air travel that drive demand. As you plan your routes, think about taking advantage of smaller airlines.
A big factor in JetBlue’s recent bid to woo Spirit was their desire to reduce the number of flights on their own route. That way, they can give people more compelling pricing options and make money. JetBlue and Frontier flights are smaller than that of bigger legacy carriers. This limits their ability to add flights and routes, which is why they work with airlines like American, United & Delta.
Adding Spirit’s current fleet would boost JetBlue’s by 60% to more than 450 planes. Growing a fleet through a buyout may turn out to be easier in 2022 than purchasing new planes from Boeing and Airbus, which saw a resurgence in orders in 2021 & are expected to deliver 4,000 new planes. JetBlue’s case is eased by the fact that its fleet reached capacity in 2016 and demand for air travel has not yet recovered.
“The way I think about it, the buyout offer feels like the speed of progress,” said JetBlue CEO Robin Hayes. “It feels more rapid than how we might have done it if we’ve been doing this for years.”
JetBlue is entering a new era of international expansion and this deal will definitely assist them with that. Upon completing the deal, JetBlue will have more access to markets and better schedules. Beyond that, they’ll also be able to cover more locations.
The deal faced several obstacles. If the merger were to happen, the airline would have to scrap its planned merger with Frontier Airlines. A potential regulatory problem could arise because of their overlap in some markets with JetBlue. The Department of Justice has sued JetBlue to prevent their partnership with American Airlines because they overlap in the northeast.
Frontier and Spirit currently have different markets, with Frontier focusing on the West and Spirit on the East Coast. They each offer a combined fleet of about 280 plans that would make things easier for customers.
Travelers are beginning to feel the effects of increased competition and shorter routes but predicted figures from the International Air Transport Association mean that numbers will reach 94% of peak by 2019, which is faster than before.
Airline companies all over the country are starting to claw back revenue this year, but they are still far below the pre-pandemic levels. Airlines lost a ton of money last year, and it is unclear if they will make that up in 2022.
“I’m very pleased with our forecast of passenger numbers over the coming years. It gives us good reason to be optimistic about the future for aviation globally.”- Willie Walsh, director general at the IATA “We have seen good demand for air travel over the course of the year and this is continuing into December.”-Shane Parker, European Aviation President, BA “We are not expecting the situation to worsen dramatically in the coming months.”- IATA”There is a good chance there will be further international discussions in the next 3 weeks.” – European Aviation.