JetBlue to End American Alliance to Focus on Spirit Merger Approval

JetBlue Airways will not fight to save its alliance with American Airlines in the northeastern U.S., following a judge's ruling that the pact violated U.S. antitrust law and must be unwound. Instead, JetBlue will shift its focus to securing approval for its proposed merger with Spirit Airlines.

"Despite our deep conviction in the procompetitive 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," the New York-based airline said Wednesday. The NEA refers to the name of the partnership, the Northeast Alliance.

American, in a separate statement Wednesday, said that it maintains plans to appeal the ruling but respects JetBlue's decision. It will work with the airline to "seamlessly" end the alliance.

American and JetBlue will unwind their partnership over the coming months. The pact is wide ranging including a codeshare partnership in Boston and New York, slot leases at busy New York LaGuardia and JFK airports, a loyalty tie up, and revenue sharing mechanism on joint routes. It even included the divestment of select slots at Washington's Reagan National airport, which Southwest Airlines recently acquired.

The timeline suggests that the busy summer travel season, which typically ends after the U.S. Labor Day holiday in early September, will be unaffected by JetBlue's decision to end the alliance. However, the judge in the case could alter the timeline at a hearing scheduled for July 26.

JetBlue still has a fight ahead. Ending the American alliance is not a guaranteed path to the U.S. Justice Department changing its view and approving its merger with Spirit. The regulator has previously indicated that it has concerns about the merger even without the JetBlue-American partnership, and many viewed the alliance as a key bargaining chip in JetBlue's negotiations with the DOJ. The regulator sued to block the combination in March; a court date is set for October.

"The DOJ should reconsider and support our plan to bring a national low-fare competitor to the Big Four," JetBlue said Wednesday. "We are open to working with the DOJ to address any remaining concerns they have."

The JetBlue-Spirit merger would create the fifth largest airline in the U.S. ahead of Alaska Airlines. The combination has the support of the state of Florida, as well as the Association of Flight Attendants-CWA.