Many people have been keeping a close eye on major U.S. airline developments as they make travel plans for the upcoming months.
From labor disputes with flight attendants that threaten service interruption to concerns about holiday travel mishaps, passengers — and the carriers — have a lot on their minds.
Related: Popular venue off the Las Vegas Strip closes abruptly
Southwest Airlines LUV, for its part, has reached a tentative agreement on a new contract with its flight attendants, calming some fears.
Currently negotiating with federal mediators, however, is the Association of Professional Flight Attendants (APFA) on behalf of American Airlines AAL employees.
This is particularly nerve-racking because the APFA has named Nov. 17 as the day it could ask for a release from the mediation talks. Such an action would trigger a 30-day cooling off period and then a possible strike just in time for the December holidays.
A JetBlue Airways aircraft and a Spirit Airlines aircraft.
Shutterstock/TS
JetBlue Airways has a major court battle to fight
For New York-based JetBlue Airways JBLU, a huge hurdle that will affect the future of its business is immediately at hand.
The airline faces an antitrust trial brought by the Department of Justice and six states (plus the District of Columbia) who have sued to block JetBlue’s acquisition of Spirit Airlines SAVE.
The legal action to stop the $3.8 billion merger is currently expected to last until Dec. 5.
“In a trial brief filed Monday (Oct. 30), the litigants reiterated arguments from when they filed the case in March. An absorption of Spirit by JetBlue would harm consumers by removing a disruptive ultralow-cost carrier (ULCC) from the market, the DOJ contends, which would lead to fare increases,” reported Robert Silk of Travel Weekly.
JetBlue has attempted to mitigate competition worries at airports with which both it and Spirit do heavy business.
“In Boston, Newark and Fort Lauderdale, JetBlue has an agreement to transfer Spirit’s gates and or landing authorizations to budget carrier Allegiant,” Silk wrote. “At LaGuardia, JetBlue has agreed to turn over Spirit’s holdings to Frontier.”
Executives at the two airlines take issue with the claim that the proposed deal would cause harm to consumers.
They say a bigger JetBlue would allow it to more effectively compete with American, Southwest, Delta Air Lines DAL and United Air Lines UAL.
“We look forward to presenting our case to court over the next few weeks, as we strongly believe our combination with Spirit is the best opportunity to disrupt the industry by increasing competition and choice, creating a long overdue national low fare challenger to the dominant Big Four Airlines,” said JetBlue CEO Robin Hayes on the carrier’s third quarter earnings call Oct. 31.
“We expect the trial will proceed according to the process the judge laid out and is currently scheduled to conclude during the first week of December,” Hayes continued. “Assuming a successful outcome, we remain on track to close the transaction in the first half of next year.”
After the earnings report, JetBlue shares fell to a more than 10-year low. The stock closed at $3.69 per share on Nov. 1.
Get exclusive access to portfolio managers and their proven investing strategies with Real Money Pro. Get started now.
