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Above, Airbnb is protecting short-term rentals from parties. (Photo source: Party Squasher)

Airbnb makes its party ban permanent

June 29, 2022

The party’s over: Airbnb announced a global ban on parties on Tuesday, June 28.  The order follows a temporary restriction that the company put in place two years ago, reports NBC News.

The company is permanently banning “disruptive parties and events,” which include open-invite gatherings. “Party houses,” which people book to throw a large event for just one night, will stay banned as well.

Airbnb and other short-term rental platforms, such as Vrbo, have struggled with party houses and large-scale events.

Airbnb placed a ban on party houses and rolled out several safety features in 2019 after five people were killed in a shooting at one of its bookings. In 2020, the company instituted a global ban on all parties as the pandemic hit.

Indeed, Airbnb says, since it implemented its policy in August 2020, it has seen a 44% year-over-year drop in the rate of party reports. “The temporary ban has proved effective, and today we are officially codifying the ban as our policy,” the company said in a blog post.

But there’s one big catch: Due to the way these companies operate, they can’t always stop parties from taking place. Guests can sometimes check in to remote properties, themselves, while the owner is away and invite as many people over as they want.

Airbnb said that guests who attempt to violate its rules will face consequences varying from account suspension to full removal from the platform. In 2021, for example, more than 6,600 guests were suspended from Airbnb for violating its party ban.

Research contact: @NBCNews

This entry was posted in Business and tagged Airbnb, Can't always stop remote parties from taking place, Disruptive parties and events, Global ban on parties, NBC News, Partiers face account suspension or full removal from platform, Since implementing policy in August 2020.. Airbnb has seen a 44% drop in party reports, Vrbo on June 28, 2022 by Poll-Vaulter.

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Above, the ad has a diverse cast, including underrepresented female riders. (Photo source: NCA/Royal Enfield)

Not your dad’s midlife crisis: Motorcycle brand tries to woo new generation of riders

August 11, 2022

Motorcycling is developing an increasingly archaic image. Indeed, in recent years, manufacturers such as Harley-Davidson have reported falling sales amid an aging demographic, reports Adweek.

But now, multinational motorcycle brand Royal Enfield, based in India, wants to change that. Its new global campaign, created by U.K.-based agency New Commercial Arts (NCA), aims to attract a younger, more diverse audience–particularly women.

The campaign more closely resembles a fashion ad than one for a motorcycle company—and it promotes Royal Enfield’s new Hunter 350 model, which targets a younger demographic living in urban environments. The bike is smaller and lighter than many traditional motorcycles and “designed to make you look great on your social posts,” according to the brand. 

In the film, a group of young and stylish Hunter riders gather and traverse the streets of east London, while photographing themselves at each stop. Notably, the cast is diverse and includes female riders, who are largely underrepresented in motorcycling. 

The spot’s soundtrack is Richard Hawley’s 2007 song, “Tonight the Streets Are Ours.” Adriaan Louw directed the film through production company Familia.

Other parts of the campaign—social, digital, and outdoor ads—comprise the photos that the friends captured on their ride.

“Forget about the old guys in their Belstaffs,” NCA co-founder and Chief Creative Officer Ian Heartfield said in a statement. “This is about wearing what you like, standing out from the crowd, looking like you could be on the front cover of a fashion mag—while having the time of your life on two wheels, not four.”

Royal Enfield made its first bike in 1901 and is the oldest motorcycle brand in continuous production.

Research contact: @Adweek

This entry was posted in Business and tagged 'Tonight the Streets Are Ours', Adweek, Attract a younger, Cast of new ad is diverse and includes female riders, Designed to make you look great on your social posts, Harley Davidson, Hunter 350 model, more diverse demographic, Motorcycles have become old man's vehicles, NCA Chief Creative Office Ian Heartfield, New Commercial Arts (NCA), Richard Hawley, Royal Enfield on August 10, 2022 by Poll-Vaulter.

Above, a Domino's pizza. (Photo source: #dominos/Instagram)

Ciao to U.S. chow: Domino’s Pizza quits Italy after locals shun American pies

August 10, 2022

Domino’s Pizza’s footprint in the Home of Pizza has proven to be short-lived—with Italians favoring local pies over the American version, reports Bloomberg.

After starting operations in Italy seven years ago, Domino’s now has closed all 29 branches nationwide. The company borrowed heavily on its plans to open 880 stores; but faced tough competition from local restaurants that expanded their delivery services during the pandemic. It finally sought protection from creditors after running out of cash and falling behind on its debt obligations.

The company already had reduced operations in the country from its peak in 2020 and stopped offering delivery from its website on July 29.

The U.S.-based chain entered Italy in 2015 through a franchising agreement with ePizza SpA and planned to distinguish itself by providing a structured national delivery service; along with American-style toppings, including pineapple.

“We attribute the issue to the significantly increased level of competition in the food delivery market with both organized chains and ‘mom & pop’ restaurants delivering food, to service and restaurants reopening post-pandemic and consumers out and about with revenge spending,” ePizza said in a report to investors accompanying its fourth-quarter 2021 results.

Still, the closures came as a surprise to some of its customers, who turned to the chain’s Italian social-media channels—questioning why their calls and orders weren’t going through or why their local store had shut.

Research contact: @Bloomberg

This entry was posted in Business and tagged After locals shun American pies, American-style toppings such as pineapple, Bloomberg, Closing all 29 branches in Italy, Domino's Pizza, ePizza SpA, Faced tough competition from local restaurants that delivered, Had planned to open 880 stores, Quits Italy, Sought protection from creditors, Structured national delivery service, Surprise to customers on August 9, 2022 by Poll-Vaulter.

Above, how the InSinkErator food and waste disposal systems work (in cross section). (Photo source InSinkErator)

Whirlpool announces acquisition of InSinkErator

August 9, 2022

Michigan-based home appliance manufacturer Whirlpool announced on Monday, August 8, on PR Newswire that it has entered into a definitive agreement with Missouri-based Emerson Electric to acquire InSinkErator—the world’s largest manufacturer of food waste disposers and instant hot water dispensers for home and commercial use—in an all-cash transaction for $3.0 billion.

“We are excited for the unique opportunity to add InSinkErator to our portfolio of leading brands. The acquisition is a clear accelerator of our ongoing portfolio transformation and aligned with our stated goals of investing in high-growth and high-margin businesses and Win Americas,” said Marc Bitzer, Chairman and CEO of Whirlpool.

“InSinkErator is not only an iconic brand with a reputation for the highest quality and performance, but also a business that is purpose-driven and shares our vision of improving life at home,” Bitzer said, adding, “We look forward to capitalizing on the significant growth opportunities we see for this business.”

Established in 1938, InSinkErator is the leader in the food waste disposal industry, with a greater than 70% share and the industry’s most recognized and trusted brand.

InSinkErator has established an international presence that reaches nearly 80 countries, with subsidiaries in Australia, Brazil, Canada, China, Mexico, New Zealand, and the United Kingdom. The company will maintain its headquarters in  Mount Pleasant, Wisconsin.

Research contact: @WhirlpoolCorp

This entry was posted in Business and tagged 70% share of market, Emerson Electric, Home and commercial use, In nearly 80 countries, InSinkErator, PR Newswire, the world's largest manufacturer of food waste disposter and instant hot water dispenses, Whirlpool, Whirlpool CEO Marc Bitzer on August 8, 2022 by Poll-Vaulter.

Above, enjoying the ride. (Photo source: @goodboygraysoncute/#roombadogs/Instagram)

Amazon to buy Roomba-maker iRobot

August 8, 2022

Amazon continues to fill the connected-home “vacuum,” as the online retailer announced plans on Friday, August 5, to buy Roomba-maker iRobot  for $1.7 billion, including debt, reports The Wall Street Journal.

The wireless, smart-vacuum learns and maps spaces where it sucks up dust and messes. Roomba was recently a featured product in Amazon’s Prime Day event for the eighth consecutive year

Amazon said it is paying $61 a share for iRobot in an all-cash deal. The price represents a 22% premium to iRobot’s closing price of $49.99 on Thursday.

iRobot Chief Executive Colin Angle will remain in his position upon completion of the acquisition, which requires approval from shareholders.

Roomba would join other Amazon-owned products like the Alexa virtual assistant speaker and Ring video doorbell, which, together, give the retailer more ways to power smart homes.

IRobot would be the fourth-largest acquisition by Amazon—ranking behind the 2017 acquisition of Whole Foods for $13.7 billion, an $8.5 billion purchase of movie studio MGM in March, and last month’s agreement to buy 1Life Healthcare for $3.9 billion.

Research contact: @WSJ

This entry was posted in Business and tagged $1.7 billion, 1Life Healthcare, Alexa virtual assistant, Amazon Prime Day event, Fills connected-home 'vacuum', MGM, Online retailer Amazon, Plans to buy Roomba-maker iRobot, Ring video doorbell, The Wall Street Journal, Whole Foods on August 5, 2022 by Poll-Vaulter.

Above, a Whole Foods shopper. (Photo source: Whole Foods Market)

Eight food brands are selected for Whole Foods’ Local and Emerging Accelerator Program

August 5, 2022

Ten up-and-coming consumer brands have been selected to participate in Whole Foods Market’s Local and Emerging Accelerator Program—eight of them, food brands. The program provides mentorship, education, and shelf space at regional Whole Foods Market stores. Businesses also may receive financial support, reports Food Business News.

“We are delighted to welcome ten exceptional local producers to the first cohort of our Local and Emerging Accelerator Program,” said Will Betts, vice president of Local Merchandising at Whole Foods Market, a business owned by Amazon, adding, “We look forward to sharing valuable insights into marketing best practices, strategy and channel development to help expand the cohort members’ brands while preparing to introduce their products to Whole Foods Market shoppers.

“Whole Foods Market has long been committed to supporting small, local and emerging producers,” Betts said, “and the Local and Emerging Accelerator Program enhances our ability to strengthen our relationships with local brands and elevate our product selection for communities across the country.”

The program will include a 12-week curriculum, a yearlong mentorship with a Whole Foods Market regional buyer, and access to additional supplier benefits to support growth. All products must meet the company’s quality standards and product safety requirements in order to be sold in Whole Foods Market stores.

Participants may receive a $25,000 equity investment from a donor-advised fund managed by the Austin Community Foundation, with proceeds benefiting Whole Foods Market foundations.

Among the Food brands participating in the program are the following:

  • Buns Bakery, Providence, Rhode Island, a traditional Israeli-Jewish baker of babka, challah, and rugelach (North Atlantic region);
  • CHKP, Brooklyn, New York, a producer of non-dairy, chickpea-based yogurt alternatives (Northeast region);
  • Coyotas, San Diego, a Mexican-American maker of grain-free tortillas formulated with cassava flour (Southern Pacific region);
  • Good Girl Chocolate, Oklahoma City, a brand of gluten- and soy-free bean-to-bar chocolate sweetened with coconut sugar (Southwest region);
  • Numa, Fallsington, Pennsylvania, a mother-and-daughter-founded brand of taffy and peanut candies inspired by traditional Asian recipes (Mid-Atlantic region);
  • Onana Foods, Fort Collins, Colorado, a maker of grain-free tortillas made with plantains, baking powder and sea salt (Rocky Mountain region);
  • Pizzazza, Bellingham, Washington, a line of frozen pizzas topped with locally grown and produced ingredients (Pacific Northwest region); and
  • Theo’s Plant Based, Chicago, a creator of beet jerky supporting regenerative farming practices (Midwest region)

Hair care brand Tangles & Beyond, based in Hattiesburg, Misissippi; and skin care maker Vamigas of Alamo, Caliornia also are participating in the program.

Research contact: @FoodBizNews

This entry was posted in Business and tagged 12-week curriculum, Access to additional supplier benefits to support growth, Amazon, Buns Bakery, CHKP, Coyotas, Eight food brands selected, Food Business News, Good Girl Cholcolate, Hair care brand Tangles & Beyond, Local and Emergency Accelerator Program, Numa, Onana Foods, Participans may receive a $25K equity investment from Austin Coimmunity Foundation, Pizzazza, Skin care producer Vamigas, theo's Plant Based, VP of Local Merchandising, Whole Foods Market, Will Betts, yearlong mentorship with a regional buyer on August 4, 2022 by Poll-Vaulter.

Above, the limited-edition kicks promoting Heineken Silver. (Photo source: Heineken)

Beer here: Limited-edition kicks promoting Heineken Silver are designed by the Shoe Surgeon

August 4, 2022

Getting beer on your shoes might be a hazard of sticky-carpeted nightclubs, but having beer in your shoes? It’s a fashion statement, according to Heineken, reports Ad Age.

The brand’s Asia Pacific branch has created “Heinekicks,” a limited-edition line of sneakers that feature soles injected with Heineken Silver, a new lighter brew aimed at Gen Z. 

The brand teamed up with sneaker designer Dominic Ciambrone, aka the Shoe Surgeon (who’s designed kicks for the likes of Drake, DJ Khaled and LeBron James) to create the shoes. The campaign comes from the agencies, Publicis Le Pub and BBH Singapore.

According to Heineken’s statement, the point of the kicks is to illustrate the idea of “walking on beer” and create an “unexpectedly smooth and unique” sensation while you’re on the go—mirroring the “smooth” taste of Heineken Silver.

The design itself also reflects the signature colors of the brew, with a green lenticular upper, and silver and red accents. And built into the tongue is a removable metal bottle opener.

“Partnering with Heineken for their new beer was a fun challenge,” said Ciambrone. “We both share a passion for innovation and pushing boundaries and created a design to reflect that. The shoe not only embodies the energy of Heineken Silver, but literally carries it. I can’t say I’ve ever designed a sneaker that contains actual beer before.’’

The “Heinekicks” will drop in Singapore in the fourth quarter; 32 pairs have been created, seven of which are up for grabs.

Meanwhile, they can be seen on display from August10-16 in a Singapore shopping mall, the Limited Edition Vault at  313@Somerset, as part of a “Project Future” exhibition organized by Cultural Cartel x Tomorrow Lapse.

Research contact: @adage

This entry was posted in Business and tagged 'Walking on beer', 32 pairs created, 7 pairs up for grabs, a new lighter brew aimed at Gen Z, Ad Age, AKA the Shoe Surgeon, BBH Singapore, Built into the tongue is a metal bottle opener, Fashion statement, Heineken, Heinekicks, Publicis Le Pub, Sneaker designer Dominic Ciambrone, Soles injected with Heuineken Silver on August 3, 2022 by Poll-Vaulter.

Above, author Stephen King. (Photo source: Shane Leonard/Oregon Public Broadcating)

Stephen King to testify for government in book-publisher merger trial

August 3, 2022

As the Justice Department bids to convince a federal judge that the proposed merger of Penguin Random House and Simon & Schuster would damage the careers of some of the most popular authors, it is leaning in part on the testimony of a writer who has thrived like few others: Stephen King, reports ABC.

 The author of “Carrie,” “The Shining,” and many other favorites, King has willingly—even eagerly—placed himself in opposition to Simon & Schuster, his longtime publisher, ABC says. He was not chosen by the government just for his fame, but for his public criticism of the $2.2 billion deal announced in late 2021—joining two of the world’s biggest publishers into what rival CEO Michael Pietsch of Hachette Book Group has called a “gigantically prominent” entity.

 “The more the publishers consolidate, the harder it is for indie publishers to survive,” King tweeted last year.

 One of the few widely recognizable authors, known for his modest-sized glasses and gaunt features, King is scheduled to take the witness stand Tuesday, August 2, the second day of a federal antitrust trial anticipated last two to three weeks.

 He may not have the business knowledge of Pietsch, the DOJ’s first witness, but he has been a published novelist for nearly 50 years and knows well how much the industry has changed: Some of his own former publishers were acquired by larger companies. “Carrie,” for instance, was published by Doubleday, which in 2009 merged with Knopf Publishing Group and now is part of Penguin Random House. Another former King publisher, Viking Press, was a Penguin imprint that joined Penguin Random House when Penguin and Random House merged in 2013.

King’s affinity for smaller publishers is personal. Even while continuing to publish with the Simon & Schuster imprint Scribner, he has written thrillers for the independent Hard Case Crime. Years ago, the publisher asked him to contribute a blurb, but King instead offered to write a novel for them, “The Colorado Kid,” released in 2005.

 “Inside I was turning cartwheels,” Hard Case co-founder Charles Ardai would remember thinking when King contacted him.

 King, himself, would likely benefit from the Penguin Random House-Simon & Schuster deal, but he has a history of favoring other priorities beyond his material well-being. He has long been a critic of tax cuts for the rich, even as “the rich” surely includes Stephen King, and has openly called for the government to raise his taxes.

 “In America, we should all have to pay our fair share,” he wrote for The Daily Beast in 2012.

 On Monday, attorneys for the two sides offered contrasting views of the book industry. Government attorney John Read invoked a dangerously narrow market, ruled tightly by the Big Five— Penguin Random House, Simon & Schuster, HarperCollins Publishing, Macmillan and Hachette—with little chance for smaller or startup publishers to break through.

  Attorney Daniel Petrocelli argued for the defense that the industry actually is diverse, profitable, and open to newcomers. Publishing, he said, means not just the Big Five, but also such medium-size companies as W.W. Norton & Co. and Grove Atlantic. The merger, he contended, would in no way upend the ambitions so many hold for literary success.

 “Every book starts out as an anticipated bestseller in the gleam of an author’s or an editor’s eye,” he said.

 Research contact: @ABC

This entry was posted in Business and tagged 'The more publishers consolidate, 2, 2 billion deal, ABC News, August 2, Author Stephen King, Big Five, Doubleday merged with Knopf in 2009, Hard Case Crime, HarperCollins Pubishing, his longtime publisher, Justice Department, King opposes Simon & Schuster, King to take witness stand on Tuesday, Macmillan, Merger among two of the world's biggest publishers, Penguin Random House, Rival CEO Michael Pietsch of Hachette Book Group, Simon & Schuster, The Daily Beast, the harder it is for indie publishers to survive.', which is now a part of Penguin Random House on August 2, 2022 by Poll-Vaulter.

Above, Ivana Trump was buried at her ex-husband's New Jersey golf club. (Photo source: New York Post)

Donald Trump gets a tax break by burying ex-wife Ivana at his golf club

August 2, 2022

Donald Trump’s first wife Ivana was buried in a gold-hued coffin at the former president’s New Jersey golf club last month, following an Upper East Side funeral service  at which she was remembered as a woman who was “adored,” reports Fortune Magazine.

However, the Trump family has been accused of having ulterior motives, Fortune says, for choosing the golf course as her final resting places—motives that could benefit the family patriarch’s finances.

Trump’s first wife—and mother to his three oldest children Donald Jr., Ivanka and Eric—passed away in July.

She was laid to rest at Trump National Golf Club in Bedminster, New Jersey, according to the New York Post, which reported that her grave was “not too far from the main clubhouse” and below the backside of the first tee.

Documents  published by ProPublica show that the Trump Family Trust previously sought to designate a property in Hackettstown—around 20 miles from the golf course where Ivana now is buried—as a non-profit cemetery company.

Indeed, defining the golf course as a cemetery could grant the business a whole raft of tax breaks.

Under New Jersey law, land being used for cemetery purposes is exempt from real estate and personal property taxes, as well as sales tax, inheritance tax, business tax and income tax.

Cemetery property is also exempt from sale for collection of judgements, with cemetery trust funds and trust income exempt from both tax and sale or seizure for collection of judgments against the company.

Ivana Trump is the only known person to have been buried onsite at Trump National Golf Club, according to reports.

Brooke Harrington, a tax researcher and professor of sociology at Dartmouth, said in a tweet on Sunday, July 31, that using the golf course as a cemetery was “a trifecta of tax avoidance.”

She added that in New Jersey, there was “no stipulation regarding a minimum [number] of human remains necessary for the tax breaks to kick in.”

“Looks like one corpse will suffice to make at least three forms of tax vanish,” she said.

A representative from the Trump Organization told Fortune in an email on Monday that links being made between Ivana Trump’s grave site and tax laws were “truly evil.”

Trump himself has previously expressed wishes to be buried at his New Jersey golf club, telling the New York Post  in 2007 that he wanted to be laid to rest in the “beautiful land” of Bedminster.

“Mr. Trump … specifically chose this property for his final resting place as it is his favorite property,” his company wrote in a 2014 filing  seen by The  Washington Post.

The filing sought approval to build a ten-plot private family mausoleum at Trump National Golf Club.

Resistance from local decisionmakers reportedly led to withdrawals and resubmittals of proposed burial sites over the years, with Trump’s ideas ranging from a small but opulent family mausoleum to a 1,000-grave site that would see plots for sale to members of the golf club.

While registering the golf course as a cemetery would exempt it from taxes, the former president already found a way to slash his tax bill for the New Jersey club by registering it as a farm, the Huffington Post  reported in 2019.

Trump reportedly owns several goats and farms hay at the resort, which reduced his tax bill by around $88,000 a year, according to a Huffington Postanalysis

Under this arrangement, the golf course was taxed at just over $6 an acre in 2019, rather than $462 an acre.

Research contact: @FortuneMagazine

This entry was posted in Business and tagged 'Farm' status reduces taxes by about $88K annually, as well as sale tax and inheritance tax and business tax and income tax, Brooke harrington, Darmouth, Exempt from real estaet and personal property taxes, First wife Ivana Trump, Former President Donald Trump, Fortune Magazine, HuffPost, New Jersey, Non-profit private cemetary company, Passed away in July, ProPublica, Several goats and hay, Taxed just $6 per acre instead of $462 peracre as a 'farm', The New York Post, Trump Family Trust, Ulterior motives for burial at Trump National Golf club in Bedminster on August 1, 2022 by Poll-Vaulter.

Above, an ad for the McPlant. (Photo source: McDonald's)

Beyond Meat stock falls following conclusion of the McDonald’s McPlant test

August  1, 2022

Shares of  Beyond Meat—the Los Angeles-based producer of plant-based meat substitutes—fell 6% in morning trading on Thursday, July 28, after J.P. Morgan revealed that  McDonald’s  had ended its U.S. test of the McPlant burger, which uses Beyond’s meatless patties, reports CNBC.

The fast-food giant confirmed to CNBC on Thursday that the McPlant test had concluded as planned. Neither McDonald’s nor Beyond Meat has announced any plans for additional testing or a nationwide launch.

 Indeed, Beyond’s stock has fallen 53% this year—dragging its market value down to $2.06 billion. Wall Street has become skeptical about the company’s long-term growth opportunities as grocery sales lag.

 Moreover, buzzy partnerships with restaurant giants like Pizza Hut owner Yum Brands and McDonald’s haven’t progressed to many permanent nationwide menu offerings yet.

 McDonald’s first tested the meat-free burger in eight restaurants in the United States in November to try to get an idea of how the menu item would impact its kitchens. In mid-February, it rolled the McPlant out to roughly 600 locations to learn more about consumer demand for the menu item.

 Analyst research reported lackluster demand for the Beyond burger. BTIG analyst Peter Saleh wrote in a June note that franchisees told him that McPlant sales were disappointing, coming in at or below the low end of projections.

 J.P. Morgan analyst Ken Goldman wrote in his note on Thursday that some McDonald’s restaurant employees told him that the burger didn’t sell well enough, potentially putting a nationwide launch in jeopardy.

“Consensus contemplates 21% growth for BYND’s total top line this year, followed by another 25% next year. These rates will not be easy to hit, in our view, without [McDonald’s] in the United States,” Goldman wrote.

 McDonald’s and Beyond  announced a three-year partnership in early 2021. The burger chain already has started selling McPlant burgers in some international markets, including Sweden, Denmark, Austria, the Netherlands and the United Kingdom. 

 In May, Beyond Meat CEO Ethan Brown said that the McPlant is selling well in the U.K. and Austria.

 Beyond is expected to report its second-quarter earnings after the bell on August 4.

 Research contact: @CNBC

This entry was posted in Business and tagged Analyst Ken Goldman, Beyond Meat, Beyond Meat CEO Ethan Brown, Beyond's meatless patties, CNBC, Did not sell well in USA, J.P. Morgan, McDonald's, Producer of plant-based meat substitutes, Rolled out to 600 U.S. locations, Selling well in the UK and Austria, Test in USA of McPlant burger, Yum Brands on July 29, 2022 by Poll-Vaulter.

Photo source: Joe Cavaretta/Sun Sentinel/Tribune News Service

JetBlue and Spirit Airlines plan to merge, creating fifth-largest U.S. carrier

July 29, 2022

JetBlue Airways said  on Thursday, July 28, that it had reached a deal to buy Spirit Airlines, a merger that could reshape the airline industry by putting pressure on the nation’s four dominant airlines. The deal, which values Spirit at $3.8 billion, comes a day after Frontier’s bid for Spirit fell apart. It is likely to face antitrust scrutiny, reports The New York Times.

The deal would create the nation’s fifth-largest airline, with a combined share of more than 10% of the market, behind United Airlines, which has a nearly 14% share. Delta Air Lines and Southwest Airlines control more than 17% each, while American Airlines, the largest U.S. carrier, has more than 18%.

“We believe we can uniquely be a solution to the lack of competition in the U.S. airline industry and the continued dominance of the big four,” Robin Hayes, JetBlue’s chief executive, said in a statement. “By enabling JetBlue to grow faster, we can go head-to-head with the legacies in more places to lower fares and improve service for everyone.

Frontier Airlines and Spirit had announced merger plans in February, but they called that deal off on Wednesday, after Spirit struggled to convince its shareholders to back the offer, which fell short of JetBlue’s by about $1 billion.

JetBlue and Spirit said they expected to seek approval for the deal from Spirit’s shareholders this fall and from regulators by early 2024. The airlines said they expected to close the transaction no later than the first half of 2024, with plans to begin operating

But while the airlines have agreed to combine, closing the deal is far from certain. The Biden Administration has taken a tough stance on antitrust enforcement, challenging corporate mergers that may reduce competition. Regulators have already sued JetBlue and American Airlines over a partnership at airports in Boston and New York.

To address regulatory scrutiny, JetBlue has said it would preemptively divest from certain airports where the company and Spirit together have a big presence. One of the biggest concerns in airline mergers is that they can make one company dominant at certain airports or on certain flight routes, giving it the ability to squelch competition and raise fares for some travelers.

If regulators prevent the deal from going through, JetBlue would pay a fee of $70 million to Spirit and $400 million to its shareholders.

Under the merger agreement, JetBlue would acquire Spirit for at least $33.50 per share in cash—significantly more than Spirit’s closing price of $24.30 on Wednesday.

The combined airline will be based in New York and led by JetBlue’s chief executive, Robin Hayes. It will have a fleet of 458 aircraft, employ 34,000 employees and serve an estimated 77 million customers, the airlines said.

JetBlue said it expected $600 to $700 million in annual savings from spreading fixed costs over a larger business once the two airlines are integrated. Based on 2019 revenues, the combined airline is projected to have annual revenues of about $11.9 billion.

JetBlue said the acquisition would help it to expand its presence in certain cities such as Fort Lauderdale, Orlando, San Juan, and Los Angeles. The airline said it expected to grow at the hub airports of the four largest carriers, such as Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami—a strategy devised in part to try and win over antitrust regulators who are eager to see more competition at airports where one or two airlines control a large majority of gates and flights.

But even if the deal closes successfully, airline mergers are notoriously difficult, requiring the melding of unions, sometimes antiquated and incompatible computer systems, mismatched fleets of aircraft, and disparate company cultures.

“The merger will be a case study of the winner’s curse,” Erik Gordon, a business professor at the University of Michigan, said. “JetBlue will face years of nightmares trying to integrate aircraft, systems, and cultures that are from different planets.”

On Thursday, Sara Nelson, the president of the Association of Flight Attendants-CWA,—which represents flight attendants at 19 airlines, including Spirit—said that her union would only support the deal if flight attendants share in its benefits.

“Our job is to improve conditions for workers and to be strategic about how we do that,” she said in a statement.

The airlines said they would operate independently, with loyalty programs and customer accounts unchanged, until the transaction closes.

Research contact: @nytimes

This entry was posted in Business and tagged 34K employees, 458 aircraft, American Airlines has 18%, Antitrust scrutiny, Association of Flight Attendants-CWA, Creates nation's fifth-largest airline, Deal with Frontier fell apart day before, Delta and Southwest control more than 17% each, JetBlue to acquire Spirit Airlines, JetBlue's CEO Robin Hayes, Serve an estimated 77 million customers, Start operating in 2024, The New York Times, UMichigan business professor Erik Gordon, United Airlines has 14% share, Will seek regulatory approval by early 2024, Will seek shareholder approval, with 10% of market on July 28, 2022 by Poll-Vaulter.
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