Report: Southwest’s ‘Nationwide Grounding’ Foreshadows More Consumer Headaches Under JetBlue-Spirit Merger
WASHINGTON, DC — The proposed merger between JetBlue and Spirit Airlines would be a raw deal for consumers, a review of Securities and Exchange Committee records by government watchdog Accountable.US has found. Beyond concerns raised by federal regulators the merger would lead to higher consumer fares and diminished route options under further monopolization of the industry, Accountable.US’ review found JetBlue and Spirit have disclosed underinvestment and vulnerabilities in their businesses that could make them susceptible to the same kind of service failures that left Southwest spiraling last year with thousands of cancellations and delays during peak holiday season.
Meanwhile, JetBlue and Spirit set aside millions of dollars for their executives that could have otherwise been spent on infrastructure improvements. After taking a combined $2.75 billion in pandemic bailouts, Spirit and Jetblue boosted their CEOs’ compensation packages in 2021 for totals nearing $3.9 million and $3.5 million, respectively. In 2022, both CEOs still maintained compensation packages exceeding $3 million.
The report comes on the heels of a “nationwide grounding” by Southwest this week leading to delays for thousands of travelers. Accountable.US previously found Southwest’s holiday cancellation crisis traced back to the company’s decision to prioritize giveaways to investors over necessary infrastructure investments — which apparently remains the case. Consumers would likely deal with more of this kind of problem under the proposed JetBlue-Spirit merger that the U.S. Department of Justice along with 4 states are suing to block. The antitrust trial is now set for October 16.
For both JetBlue and Spirit, the priority has been enriching their executives rather than making necessary investments in infrastructure and emergency preparedness. Similar greedy management decisions from Southwest Airlines led to a flight cancellation crisis that stranded thousands of families during the holidays. The Justice Department is right to challenge this legally-shaky potential merger that creates nothing but a turbulent situation for consumers -- from higher fares, fewer travel routes, and the greater likelihood of mass cancellations during extreme weather events.”
Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power.
More from Accountable.US on the airline industry:
- Watchdog: Southwest Cancellation Crisis Follows Execs’ Choice to Reward $5.6B to Shareholders Instead of Investing in Infrastructure
- Watchdog: Southwest’s Promotion of Executives AFTER Cancellation Crisis Signals More Turbulence for Consumers
- (July 2022) Flight Cancellation Crisis the Result of Airline Industry’s History of Worker Mistreatment