JetBlue said it might end its relationship with American Airlines within the Northeast after losing a court battle over the deal and as an alternative deal with salvaging its proposed purchase of Spirit Airlines.
JetBlue Airways said Wednesday it might not appeal a federal court ruling blocking its deal with American.
With its decision, JetBlue said the Department of Justice should reconsider its opposition to the JetBlue-Spirit merger.
The Department of Justice sued to block each the JetBlue-American deal and JetBlue’s agreement to buy Spirit for $3.8 billion because it might hurt competition.
The Department of Justice won a lawsuit in Boston last fall over the JetBlue-American partnership. U.S. District Judge Leo Sorokin decided in May that the airline they have to end their Northeastern Allianceor the NEA, which began in 2021, since it violates antitrust law.
“Despite our firm belief in NEA’s pro-competitive advantages, after much deliberation, JetBlue made the difficult decision not to appeal the court’s decision … and as an alternative initiated the dissolution of NEA, starting a liquidation process that may last over the approaching months,” the Recent York City JetBlue. “Now we’ll focus much more on the proposed combination with Spirit.”
Shortly after JetBlue’s announcement, American said it respected JetBlue’s decision to “deal with other antitrust and regulatory challenges” but would proceed to appeal the case.
JetBlue’s decision to select to buy Spirit over a geo-restricted deal with American has turn out to be more likely in recent weeks as JetBlue has declined to say whether it’ll appeal the Northeast Alliance ruling.
While the deal with American helped JetBlue expand in a single region of the country, the acquisition of Spirit would allow JetBlue to expand rapidly to almost 10% of the Polish air travel market. That may make JetBlue much closer in size to United, Delta, Southwest – and American.
Last month, JetBlue and American asked Judge Sorokin to allow them to proceed selling tickets of their flights, an arrangement called code-sharing and offering mutual advantages to frequent flyers. The judge has not ruled on the appliance, but these NEA features will now disappear.
Meanwhile, a trial was held scheduled for October in a Justice Department lawsuit against the JetBlue-Spirit merger. The federal government argues that customers will suffer if Spirit – the country’s largest discount airline – is eliminated.