JetBlue Terminates Partnership with American Airlines: Key Reasons Explained

JetBlue will dissolve its partnership with American Airlines and will not appeal a judge’s ruling ordering this action. This strategic decision aims to protect JetBlue’s planned acquisition of Spirit Airlines.

The carrier expressed strong disagreement with the ruling but has decided against pursuing an appeal, according to a statement from the airline. This development follows a US judge’s order in May that instructed JetBlue and American to terminate their partnership. The previous alliance allowed customers to access both airlines’ route networks while earning reciprocal rewards.

During the ruling, the judge noted that the alliance provided both carriers with a substantial interest in the joint success of their operations instead of fostering competition as independent rivals in the marketplace.

This decision against appealing comes as JetBlue works diligently to complete the acquisition of Spirit Airlines, a deal valued at $3.8 billion that JetBlue agreed to last year. Finalizing this merger would position JetBlue as the fifth-largest airline in the United States.

In a statement, JetBlue mentioned, “Despite our deep conviction in the procompetitive benefits of the [alliance], after much consideration, we are moving forward with the termination process. This shift allows us to focus on our proposed combination with Spirit Airlines, which represents a remarkable opportunity to transform the competitive landscape in the U.S. and enhance the JetBlue Effect across more routes and markets.”

American Airlines, however, remains committed to appealing the ruling.

“We respect JetBlue’s decision to refocus on its various antitrust and regulatory challenges. At the same time, we firmly believe the alliance has fostered competitive advantages, and the judicial decision overlooks the consumer benefits provided by our partnership,” American stated. “American will continue with an appeal and remains dedicated to working with JetBlue to ensure our shared customers experience seamless travel.”

The partnership, known as the “Northeast Alliance,” was established in 2020 and expanded the following year. It specifically covered flights operating out of major airports in the New York City area and Boston, including John F. Kennedy International Airport, LaGuardia Airport, Newark Liberty International Airport, and Boston Logan International Airport.

However, the partnership faced scrutiny in 2021 when the Department of Justice initiated legal action against American Airlines, alleging that the alliance would impose higher costs on passengers.