International Business: JetBlue defends bid to buy Spirit – Gulf Digital News

International Business: JetBlue defends bid to buy Spirit – Gulf Digital News

NEW YORK: JetBlue Airways yesterday mounted a vigorous defence of its unsolicited $3.6 billion bid to acquire ultra-low-cost carrier Spirit Airlines, saying the company is “highly confident” of securing regulatory approval for the deal.

The New York-based carrier on Tuesday surprised Wall Street with a $33 per share cash offer, potentially derailing a $2.7bn merger plan between Spirit and Frontier Group Holdings.

JetBlue said while it expects a lengthy regulatory process, it is counting on its track record of lowering fares and increasing competition to get the nod.

“We are convinced...that average fares come down more when JetBlue flies into a legacy market than when an ultra-low-cost carrier does,” chief executive Robin Hayes told investors on a call.

Analysts have questioned the benefits of JetBlue’s Spirit bid.

Though both carriers have fleets dominated by Airbus SE , any potential cost savings from the deal will be diluted by JetBlue’s need to bump up the pay of Spirit pilots, who are on a lower band, Raymond James analyst Savanthi Syth said in a note to clients.

JetBlue expects the deal to inflate labor costs, but said it also would result in certain economies of scale, producing savings of $600 million to $700m within three years. It also