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

Author

Listed:
  • Javier Donna

    (University of Miami-Rimini Center for Economic Analysis)

  • E. Mina Guler

    (University of Miami)

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.

Suggested Citation

  • Javier Donna & E. Mina Guler, 2026. "Who Replaces Spirit? Entry, Exit, and Low-End Fares," Working Papers 409, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:409
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    File URL: https://rednie.eco.unc.edu.ar/files/DT/409.pdf
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    Keywords

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    JEL classification:

    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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