March 14, 2023
Tourism is Florida’s principal economic driver. Last year, our state welcomed over 100 million visitors, which generated over $40 billion in economic activity. So, it goes without saying that tourism contributes significantly to our GDP, state job count, and tax revenue.
Recent data indicates that in 2019, Florida’ visitors supported over 1.6 million in-state jobs. And according to the Office of Economic and Demographic Research, for every $1 the state invests in VISIT FLORIDA, $3.27 in state tax revenue is generated. This is not only great news for the state treasury, but also for the more than half of our state’s small businesses supported by tourism.
However, with flight costs jumping more than 40%, tourism in our state has become jeopardized. We need to lower flight costs or else risk thousands of state jobs and millions in tax revenue. That’s why it’s so puzzling that the U.S. Department of Justice just announced it’s trying to block Spirit Airlines’ merger with JetBlue, which would reduce fare prices by increasing competitive pressures on the Big Four airlines.
Florida Sen. John Pizzo sent a letter to the DOJ urging it to approve the merger for this very reason. As the president and CEO of Florida’s leading think tank with an expressed mission of increasing opportunity for all Floridians, I agree that this state desperately needs an airline industry shake-up and that a Spirit-JetBlue merger would deliver it.
Spirit is already a top Florida airline. However, Spirit recognizes that to continue meeting our state’s needs, it needs to become more competitive with the Big Four, which control about 80% of the marketplace. Permitting its merger with JetBlue would facilitate its continued instate growth in a way that Florida so desperately needs.
When JetBlue first entered the marketplace, Hartford-Tampa delivered 48% more daily passengers and experienced a 20% average fare reduction, while Orlando sent 60% more passengers to Salt Lake City daily at the same dramatically reduced rate for ticket prices. Allowing JetBlue to expand its Florida footprint today will deliver the same dramatically effective results. In fact, the airline already announced that if the DOJ permits the merger — which Spirit’s shareholders have already approved — the new, bigger and better company will service more than 150 daily flights at Orlando International Airport and 250 from Fort Lauderdale-Hollywood International Airport.
More importantly, however, JetBlue’s increased presence in the state will force the other airlines to become more consumer-friendly — meaning that no matter what airline tourists need to take to get here, they will likely see more choices at reduced fares.
The DOJ has even admitted that JetBlue “offering lower fares and better service [forces] competitors to do the same.” It also acknowledged that “JetBlue is uniquely disruptive,“ “has a long and public track record of significantly lowering fares when it enters a market,” and “has saved consumers a total of more than $10 billion since the airline’s founding.” So why wouldn’t the department allow this merger to move forward?
Before JetBlue and Spirit Airlines came around, the big four airlines took us all for a ride. The competition these two airlines incited ended the calcified nature of the industry that cost us all dearly. We’re now at a point where we need more competition and more fare reductions, but for that to happen, the DOJ needs to get on the same page.
The Florida attorney general and legislature need to demand the DOJ to back off its currently hostile position. Our economy is counting on the department allowing responsible free enterprise to grow, expand, and thrive.
