American Airlines and JetBlue flights prepare to depart at Los Angeles International Airport on January 11, 2023.
Caroline Cole | Los Angeles Times | Getty Images
JetBlue Airways said on Wednesday that it would end its partnership with the Northeastern U.S. American airlines New York Airlines to focus on acquisitions after federal judge orders airlines to terminate pact Spirit Airlines instead.
American said in June it would challenge the ruling against the JetBlue partnership, known as the Northeast Alliance, or NEA, but New York-based JetBlue said Wednesday it would not appeal the decision. The ruling follows a lawsuit filed in 2021 by the Justice Department, six states and the District of Columbia to block the alliance, saying it is anticompetitive.
In a statement, JetBlue said: “While we strongly believe that the NEA provides pro-competitive benefits, after careful consideration, JetBlue has made the difficult decision not to challenge the court’s ruling that the NEA cannot continue as it is currently enacted. appeal against the decision.”
JetBlue said it has begun the process of terminating the agreement and that “the process of winding it down will take place over the coming months.” JetBlue said it “will now turn increased attention to our proposed merger with Spirit Airlines.”
JetBlue’s deal to acquire Spirit Airlines follows JetBlue’s Northeast partnership with American Airlines. The NEA, approved in the final days of the Trump administration, allows the two airlines to share passengers and revenue and coordinate flight schedules.American Airlines and JetBlue said they needed the deal to better compete with larger airlines such as Unity and delta In crowded airports in the New York area and Boston.
But a federal judge ruled in May that the partnership was anticompetitive and ordered the two airlines to cancel the alliance.
American said on Wednesday it would still appeal the ruling.
In a statement on its website, American Airlines said: “JetBlue has been an excellent partner and we will continue to work with them to ensure our mutual customers can travel seamlessly without disrupting their travel plans. .”
A spokesman for the airline did not immediately say how American would salvage the deal if it wins its appeal, should JetBlue plan to begin unwinding it.
“Of course, we respect JetBlue’s decision to focus on other antitrust and regulatory challenges.”
JetBlue said in a securities filing that it notified American Airlines on June 29 that it was terminating its relationship as a result of the judge’s ruling. JetBlue said the termination will take effect on July 29.
After a bidding war with low-cost rivals, JetBlue wins the Spirit acquisition deal in July 2022 frontier airlines. JetBlue argues that it needs Spirit to grow and better compete with the big carriers that dominate domestic air travel. The combined airline will become the country’s fifth-largest carrier.
Acquiring Spirit would give JetBlue access to more planes at a time when manufacturers are struggling to keep up with demand. It will also get hundreds of pilots who are also in short supply.
From the start, the deal faced formidable hurdles in winning approval from the Biden administration, which has vowed to challenge deals it sees as harmful to competition.
The Justice Department filed a lawsuit in March seeking to block the deal. “JetBlue’s plan would eliminate the unique competition offered by Spirit, as well as about half of the industry’s ultra-low-cost airline seats, and expose tens of millions of travelers to higher fares and lower Fewer options.”
Spirit shares rose more than 2 percent in after-hours trading, while shares of American Airlines and JetBlue both fell less than 1 percent.
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