JetBlue Airlines said on Wednesday that it would end its partnership in the Northeast US. american airlines after a federal judge ordered the carriers to end the dealas the New York airline focuses on the acquisition of spiritual airlines instead.
American said in June that it would challenge the decision against the JetBlue association, called the Northeast Alliance, or NEA, but New York-based JetBlue said Wednesday it will not appeal the decision. That ruling was the result of a 2021 lawsuit filed by the Department of Justice, six states and the District of Columbia to block the alliance, calling it anti-competitive.
«Despite our deep belief in the pro-competitive benefits of the NEA, after much consideration, JetBlue has made the difficult decision not to appeal the court’s determination that the NEA cannot continue as currently written,» JetBlue said in a statement. a statement.
JetBlue said it has begun to terminate the deal, «a liquidation process that will take place over the next few months.» JetBlue said it will «now focus even more on our proposed combination with Spirit.»
JetBlue’s deal to buy Spirit came together after JetBlue and American launched the Northeast partnership. The NEA, passed during the waning days of the Trump administration, allows the two airlines to share passengers and revenue and coordinate schedules. American and JetBlue said they needed the deal to better compete against big airlines like United and Delta at busy airports in the New York area and in Boston.
But a federal judge ruled in May that the partnership was anticompetitive and ordered the two airlines to break the alliance.
American Airlines said Wednesday that it will continue to appeal the ruling.
«JetBlue has been a great partner and we will continue to work with them to ensure our mutual customers can travel smoothly and without disruption to their travel plans,» American said in a statement on its website.
An airline spokesman did not immediately say how American could salvage the deal if it wins an appeal, if JetBlue plans to start unwinding it.
«Of course, we respect JetBlue’s decision to focus on its other antitrust and regulatory challenges.» JetBlue said in a securities filing that it informed American on June 29 that it was ending the partnership because of the judge’s decision. JetBlue said the termination will take effect on July 29.
jetblue won the deal to acquire Spirit in July 2022 after a bidding war with its low-cost rival border airlines. JetBlue has argued that it needs Spirit to grow and better compete against the biggest airlines that dominate domestic air travel. The combined airline would become the fifth largest in the country.
Buying Spirit would give JetBlue access to more planes at a time when manufacturers are struggling to keep up with demand. You would also gain access to hundreds of pilots, which are also in short supply.
From the beginning, that agreement has faced a high hurdle to win the approval of the Biden administration, which has vowed to challenge deals it deems detrimental to competition.
The Department of Justice sued to block the deal in March. «JetBlue’s plan would eliminate unique competition from Spirit, and roughly half of all ultra-low-cost airline seats in the industry, and leave tens of millions of travelers facing higher fares and fewer choices,» he said in a statement. the demand.
JetBlue shares were down more than 6% Thursday morning, American was down 3% and Spirit shares were little changed.