Daily Podcast: Spirit Rejects JetBlue

Skift grip

Hello from Skift. It’s Tuesday, May 3 in New York. Here’s what you need to know about the travel industry today.

Rashaad Jordan

Today’s edition of Skift’s Daily Podcast examines Spirit’s efforts to manage its takeover, the labor challenges facing corporate travel managers and how standard hotels are ready for the… hospitality in the post-Covid era.

Listen

🎧 Subscribe

Apple podcast | Spotify | Covered | Google Podcasts

Episode Notes

Spirit Airlines said Monday it would reject a $3.6 billion bid for the carrier submitted by JetBlue Airways last month, instead pursuing a $2.9 billion merger with Frontier Airlines. Why? Airlines journalist Edward Russell writes that this was largely because Spirit was unwilling to take on the risks of a deal with JetBlue.

Spirit CEO Ted Christie told his management team that the carrier does not consider the US Department of Justice approving a decision that would leave Frontier as the only major low-cost carrier in the United States. The rejection came even after JetBlue sweetened its offer last week, which included a commitment to divest all Spirit assets in Boston and New York. However, JetBlue refused to end its controversial Northeast Alliance with American Airlines despite Spirit’s concerns. The alliance is the subject of a lawsuit by the DOJ, which argued that the partnership would reduce competition on the East Coast. Aviation analysts believe the lawsuit would complicate any Spirit-JetBlue deal.

Savanthi Syth, an analyst at investment bank Raymond James, said Monday that Spirit shareholders would now vote on its proposed merger with Frontier. A Frontier-Spirit merger would create an airline with a share of just under 8% of U.S. travelers based on 2021 numbers, according to data from the U.S. Bureau of Transport Statistics.

Next, corporate travel managers are grappling with a labor shortage that is jeopardizing the industry’s recovery, writes corporate travel editor Matthew Parsons.

A recent survey by the UK’s Institute of Travel Management found that the biggest point of frustration for business travel buyers as business travel returns is dealing with a labor force. reduced work. Scott Davies, CEO of the institute, said the staffing issues they have faced over the past two years have forced them to take on greater responsibilities. An industry insider said corporate travel agencies were struggling to recruit staff because they let many experienced employees go at the height of the pandemic.

Leaders such as John Hobbs Hurrell – head of the UK agency consortium Advantage Global Network – have attributed the recruitment difficulties to finding jobs in other fields. Hurrell acknowledged that corporate travel agencies need to increase salaries to attract qualified candidates.

Finally, more and more companies are investing in lifestyle hotels, but not Standard International. CEO Amber Asher maintains that lifestyle hotels have been part of her DNA for more than 20 years, reports business travel editor Parsons in an exclusive interview ahead of next week’s Skift Future of Lodging Forum.

Asher, who will speak at the Forum in New York on May 12, said Standard International need not follow in the footsteps of competitors seeking to add luxury and lifestyle hotels to their portfolios. She added that the company is ready to drop some of the Covid-era changes guests have come to expect in hotels, including QR codes and on-demand housekeeping. Asher said the reason for the moves is that guests are eager to return to full-service hospitality.