One of the airline industry's best-known entrepreneurs says he doubts that antitrust regulators will approve the proposed JetBlue/Spirit merger.
Pan Am’s 1980 acquisition of National is generally thought to have been unsuccessful not only because it raised costs for the combined carrier but also because it did not sufficiently address Pan Am’s lack of domestic capacity and because cultures clashed.
The justice department’s antitrust division, which has already announced its opposition to the Northeast Alliance between JetBlue and American Airlines, would review any future merger proposals, including Spirit-Frontier. “JetBlue has a strong argument,” Pomerantz said. “JetBlue’s acquisition of Spirit deliver a unique pro-competitive benefit, an expansion of the JetBlue effect. That means more passengers and routes would have lower fares.’
For Lorenzo, JetBlue’s tender offer brought back memories. In 1981, Texas Air made a tender offer for 50% of the outstanding shares of Continental. At the time, Continental was trying to merge with its neighbor Western Airlines and was awaiting shareholder approval.
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