Who Replaces Spirit? Entry, Exit, and Low-End Fares

Javier Donna and E. Mina Guler
Additional contact information
Javier Donna: University of Miami-Rimini Center for Economic Analysis
E. Mina Guler: University of Miami

No 409, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: A federal court blocked JetBlue’s acquisition of Spirit Airlines in January 2024 to protect consumers who relied on Spirit’s low fares. Spirit failed anyway and ceased operations in May 2026. We ask whether the prohibition protected consumers. Using DB1B data for 2022–2025, we estimate the effect of Spirit’s exit across the 1,427 routes it served. The 5th and 10th percentile fares rise by 8.6 and 5.8 log points; mean and median fares are unaffected. Where a carrier entered, the bottom is unaffected and mean fares fall. Theharm comes from exit without replacement, which entry policy does not reach.

Keywords: Ultra-low-cost carriers; Entry and exit; Merger enforcement; Failing firm defense; Fare distribution; Antitrust (search for similar items in EconPapers)
JEL-codes: K21 L13 L41 L51 L93 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2026-10
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:409

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