Spirit Airlines is asking the government for a lifeline, and JetBlue isn't waiting around to see if it gets one. JetBlue's president told investors Tuesday the airline is moving ahead with its expansion at Fort Lauderdale, no matter what happens to its bankrupt rival.
That's a notable position to take with Spirit's home hub still in play.
Spirit filed for Chapter 11 protection for the second time in less than a year, after which JetBlue, United, Frontier, Breeze and others piled into Fort Lauderdale to grab gates Spirit was giving up. JetBlue went bigger than the rest. "We have now added significant capacity," President Marty St. George said on the earnings call, adding that "we've doubled the size of our next biggest competitor."
By February, JetBlue (JBLU +0.39%) held more than 20% of the Fort Lauderdale market, up from 18.5% a year earlier. Spirit (SAVE) still led with nearly 25%, but that was down from over 28%.
Spirit is in talks with the Trump administration about a possible $500 million loan that could hand the government up to a 90% stake in the budget carrier. Spirit's lenders are reviewing the proposal this week.
JetBlue says it's not planning around either outcome. "We did not go into this with any expectation of Spirit going away," St. George said.
He said unit revenue at Fort Lauderdale is holding up even with the new capacity, which suggests "the JetBlue value proposition resonates in South Florida."
Higher fuel prices are squeezing the whole industry, but JetBlue and other carriers say customers are still booking flights.
The Association of Value Airlines, which JetBlue isn't part of, asked the Trump administration this week for $2.5 billion to help cover the fuel jump. Fuel is the second-biggest bill airlines pay - right behind worker pay.
JetBlue CEO Joanna Geraghty said the airline is open to "anything and everything, assuming the terms would make sense for JetBlue." For now, JetBlue is sticking to its JetForward plan to get back to profit, including new domestic first-class seats.
Geraghty said JetBlue is watching what "shakes out with Spirit and value carriers." If Spirit liquidates, more gates open up. If it gets the bailout, JetBlue still owns more capacity at Fort Lauderdale than it had a year ago.
