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As the bankruptcy of Spirit Airlines winds its way through the courts, the rest of the industry is likely trying to figure out how the development will affect their own operations. Deutsche Bank (DB+2.75%) says that two Spirit-familiar names, JetBlue Airways (JBLU+3.08%) and Frontier Airlines (ULCC-0.17%), could stand to benefit more than other players in the field.
“In light of Spirit’s Chapter 11 bankruptcy filing this morning, we thought it would be useful to revisit each airline’s overlap with the low fare carrier,” the bank’s Michael Linenberg and co. wrote in a research note.
On an available-seat-mile basis, industry shorthand for how many potential customers can be flown over a given distance, JetBlue and Frontier will likely get the most breathing room should Spirit have to dramatically cut its capacity.
Though Deutsche Bank points out that American Airlines (AAL+1.20%), Delta Air Lines (DAL+3.10%), and United Airlines (UAL+2.23%) have a greater share of domestic-market overlap with Spirit than all but Frontier Airlines, the routes aren’t as critical to their bottom lines because they have significant international businesses.
Spirit’s route parallels with JetBlue and Frontier make sense given the collective entanglement. Spirit sought to merge with Frontier in 2022 but called things off when JetBlue came along with a (financially) sweeter courtship. That combination failed on antitrust grounds, sending Spirit to try and patch things up with Frontier. That didn’t work either, and Spirit declared bankruptcy soon thereafter.