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Airline mergers can cut carbon. JetBlue’s might not.
When companies consolidate, it can lead to fewer flights and lower emissions. JetBlue's proposed merger could be an exception
Airline mergers generally lead to lower emissions by reducing services and encouraging the use of bigger and more efficient aircrafts. But that may not be the case for JetBlue's plan to buy Spirit Airlines.
When a big airline absorbs another one, the company tends to shut down airport hubs that were made redundant by the purchase. That often leads to fewer flights and smaller amounts of jet fuel being burned. The resulting reduction in carbon emissions is an unintended climate benefit of airline consolidations, which usually lead to higher airfares and fewer flight options, said Megan Ryerson, the associate dean for research at Weitzman School of Design at the University of Pennsylvania.
In 2014, Ryerson examined two mergers between Delta and Northwest and between United and Continental. Her study found that the consolidation reduced the airlines’ fuel consumption by 25 to 28 percent.
“While mergers reduce competition, resulting in fare increases and reductions in service, this is balanced by large potential savings in fuel consumption,” Ryerson and her co-authors wrote. “If sustainability is a serious target for the aviation system, perhaps mergers should be encouraged, or, more directly, route and hub consolidation could be enabled and encouraged.”
The planned merger between JetBlue and Spirit comes as the aviation industry is under scrutiny for its outsize contribution to rising temperatures. In the U.S., commercial aviation consumes 10 percent of the energy used in transportation and is responsible for 2 percent of the country’s carbon emissions. The demand for air travel around the world is projected to double over the next two decades, reaching almost 8 billion passenger journeys annually by 2040, according to the International Air Transport Association.
But the proposed acquisition that would combine America's two most prominent discount airlines might not offer those same climate perks.
JetBlue and Spirit often fly directly between cities rather than traveling through hub terminals like those in Chicago’s O’Hare International Airport and Atlanta’s Hartsfield-Jackson International Airport.
“When we think of Spirit and JetBlue merging, they operate a bit more of a point-to-point network with fewer transfer operations,” Ryerson said.
As low-cost carriers, JetBlue and Spirit have homogeneous fleets with similar-sized aircraft, making it more difficult for JetBlue to accommodate a bigger customer base by using larger planes, something that has led to better fuel efficiency after other mergers.
Another factor that comes into play is JetBlue's plan to remove seats on the aircraft it would acquire from Spirit, a move that would reduce the number of passengers that it can carry and increase the amount of fuel consumed by each customer, according to Ryerson and the aviation analytics firm Cirium.
“Uncomfortable flights can mean fuel-efficient flights,” Ryerson said.
The Department of Justice sued JetBlue last week in an effort to block its acquisition of Spirit, claiming that the merger would remove 10 to 15 percent of seats that Spirit now operates.
‘Push and pull’
There are some signs that JetBlue's plans to knock out a direct competitor — by taking over Spirit — could also knock out some carbon pollution.
Reducing competition could give JetBlue the freedom to raise ticket prices, a move that in turn could decrease demand for its flights and result in fuel savings, said Robert Porter, an economics professor at Northwestern University.
“If the merger results in more market power, prices will increase, which will reduce the number of tickets sold and emissions to some degree,” Porter said.
Concerns around reduced competition and increased prices have prompted the Biden administration to pursue an unprecedented move to stop the merger by blocking the transfer of Sprit’s operating certificate to JetBlue.
JetBlue says that it mostly competes with other carriers. Only 11 percent of JetBlue flight routes overlap with Spirit’s, according to data from Cirium. JetBlue said this “represent[s] less of a reduction in competition” in a statement to E&E News.
If that's accurate, JetBlue passengers might not pay more for tickets — but that could mean they also miss out on reducing their carbon emissions.
“There's always that push and pull of saving fuel and reducing accessibility,” Ryerson said. “There's always that trade.”
