Spirit Airlines’ disappearance into the arms of a takeover-minded rival could result in an industry shakeup that leads to more air service to South Florida’s three international airports.

The outcome could be an airline with a good reputation for onboard service that’s also simultaneously sensitive to pricing — though not as low as the fares currently offered by Spirit, said industry analyst Henry Harteveldt, president of Atmosphere Research in San Francisco.

Despite Spirit Airlines’ rock-bottom ticket prices, many air travelers have loved to hate the Miramar-based carrier for its history of service flubs and fare surcharges. It’s bound to see change with talks of Spirit merging with either Frontier Airlines or JetBlue Airways.

“What I think is good here for consumers is that you have Spirit being pursued by two airlines that bring great value to the public,” Harteveldt said.

Frontier, the longtime Denver-based airline that triggered a monthslong takeover saga for Spirit in February, is a low-cost carrier like Spirit. After combining forces, the two could emerge as a “much larger budget airline” that will greatly expand over time with lots of savings for customers, Harteveldt said. That was a major part of the airlines’ pitch to the public when they first announced their proposed stock and cash deal worth an estimated $2.9 billion.

Spirit had no comment for this news article.

More service?

Then came JetBlue, the New York-based carrier that is one of the predominant carriers along with Spirit at Fort Lauderdale-Hollywood International Airport. Its hostile takeover bid of $3.6 billion appears to have overtaken Frontier’s buyout quest among major Spirit shareholders, many of whom reportedly prefer the instant allure of an all-cash offer from JetBlue.

In what appears to have been a last-ditch effort to salvage his airline’s deal, Frontier Chairman and CEO Barry Biffle wrote Spirit’s top leaders this week asking for a longer runway to the final shareholder vote.

He conceded Frontier’s proposal lacks the shareholder support needed to acquire majority control of Spirit, and asked them to extend a new date for the vote from July 15 to July 27. Spirit granted that request early Wednesday.

JetBlue Chairman and CEO Robin Hayes applauded the news, saying the New York-based airline is “encouraged by the significant progress made in our ongoing discussions with Spirit.”

“JetBlue is now standing ready to enter into a binding merger agreement with Spirit as soon as practicable and at the latest, immediately following Spirit shareholders voting against the Frontier transaction on July 27, 2022,” Hayes said in a statement.

Spirit still backs Frontier deal

But Spirit CEO Ted Christie, in a Wednesday letter to company employees, said his airline’s position has not changed and remains committed to merging with Frontier.

He said Spirit “strongly recommends shareholders vote for the merger.”

A JetBlue-Spirit combination would offer consumers an airline with a good reputation for its onboard service, while simultaneously being sensitive to pricing, though not as low as the fares offered by Spirit, according to Harteveldt.

“Both options mean South Florida residents continue to see a lot of airline service and there is a potential for that service to grow,” he said.

If Frontier loses the war, he added, “I fully believe Frontier will take the opportunity to expand in South Florida.”

“Who’s to say Frontier wouldn’t start serving secondary airports they are not serving, or they would add more routes from the three South Florida airports to new destinations?”

Fares could rise with JetBlue

While more flights could be in the offing for the region, other observers say prices are likely to go higher if JetBlue wins the contest.

“Given JetBlue’s business model and its plans to reconfigure Spirit’s fleet to match its own, there are some concerns that the airline’s costs could be higher than what Spirit offers alone or what a combined Spirit-Frontier would offer, meaning the eventual airfare would have to be higher to make up for those costs,” said David Slotnick, senior aviation business writer for The Points Guy air traveler website.

“That’s part of Frontier’s argument against JetBlue, pointing out that regulators are unlikely to approve something that could lead to higher fares than exist now,” Slotnick added. “That said, they’d still exert pricing pressure on the bigger airlines, so JetBlue argues that its bid should be approved by regulators anyway.”

In his letter to Spirit, Biffle noted that a recent decision by the U.S. Department of Transportation to award landing and takeoff rights to Spirit at New Jersey’s Newark International Airport relied on an analysis that Spirit maintains a significant cost advantage over JetBlue and United Airlines, which were also seeking the rights.

“This will effectively allow Spirit to offer lower fares to more customers while maintaining the profitability necessary to remain an effective competitor at [Newark],” he wrote.

An independent Spirit?

If Spirit ends up rebuffing both carriers to remain independent, the move would be costly, Harveldt said. Both JetBlue and Frontier have offered substantial reverse breakup fees if federal antitrust regulators choose to reject either deal for competitive reasons.

But a unilateral move by Spirit management to fly alone would likely result in lawsuits from shareholders and a movement to oust both CEO Ted Christie and the board of directors.

Harteveldt sees JetBlue prevailing.

“I think Spirit shareholders see a very compelling offer from JetBlue,” he said, “If JetBlue and Spirit agree to merge I think the two would do everything they need to do to satisfy the Department of Justice on approval.”