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Stockholders Approve Spirit-JetBlue Merger
Spirit Airlines announced today that its stockholders have approved a merger with JetBlue Airways.
In a release, Ted Christie, president and CEO of Spirit, said, “This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant U.S. carriers. We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to team members, guests and stockholders.”
JetBlue made a $3.8 billion cash offer for the airline. When the deal is done, the result will be the country’s fifth-largest carrier.
Not everyone is thrilled, however. Consumer advocates, as well as over 30 attorney generals (sent in a recent letter to DOT Secretary Pete Buttigieg) and Sens. Elizabeth Warren and Edward Markey of Massachusetts, have complained that consolidation is not consumer friendly and will result in higher fares and less options for flyers.
Marriott International Will Acquire City Express Brand in Mexico and Latin America
Marriott International said today that it has reached an agreement with Hoteles City Express, S.A.B. de C.V. for the acquisition of the City Express brand portfolio. Marriott says the “transaction is expected to make Marriott the largest hotel company in the Caribbean and Latin America (“CALA”), increasing its presence in the region by 45%, to 486 properties across 37 countries.
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The portfolio includes 152 hotels across 75 cities in Mexico and three countries in Latin America. The brand and hotel portfolio will become part of Marriott’s franchise system, adding the “by Marriott” nomenclature to the brand. The Hoteles City Express brand includes urban, suburban and extended stay properties in Mexico, Costa Rica, Columbia and Chile.
The sale marks Marriott’s entry into the affordable midscale segment and becomes its 31st brand.
Marriott expects the transaction to close between the end of 2022 and the first half of 2023.
American Airlines Reports Strong Demand in Third Quarter
In its third-quarter earnings call, American Airlines reported a $483-million profit.
The airlines revenue rose to a record $13.46 billion in the three-month quarter ending Sept. 30—up 13% from 2019, despite a cut in frequency by 10%.
“Demand remains strong, and it’s clear that customers continue to value air travel and the ability to reconnect post-pandemic,” CEO Robert Isom said in an employee note Thursday after the company reported results.
Isom stated that American will work to getting back to 95 to 100% of 2019 capacity next year. Negative factors in recovery include slowed aircraft delivery and a pilot shortage on regional aircraft.
The airline said its costs per available seat mile will likely rise 8 to 10% in the last three months of the year, compared to the same quarter in 2019 and, for the full year, as much as 13% compared to three years ago.
Delta and United also reported similar gains.
