American and JetBlue flights prepare to take off at Los Angeles International Airport on January 11, 2023.
Carolina Cole | Los Angeles Times | Getty’s paintings
JetBlue Airways said Wednesday it will end its relationship with the northeastern United States american airlines after a federal judge ordered the carriers to drop the deal as Latest York Airlines focuses on its acquisition Spirit Airlines As an alternative.
American said in June it will challenge the ruling against JetBlue’s partnership – called the Northeast Alliance, or NEA – but Latest York’s JetBlue said Wednesday it will not appeal the choice. The ruling followed a lawsuit filed in 2021 by the Department of Justice, six states and the District of Columbia to block the alliance, calling it anti-competitive.
“Despite our firm belief within the pro-competitive advantages of NEA, after much consideration, JetBlue has made the difficult decision not to appeal the court’s decision that NEA cannot proceed because it stands,” JetBlue said in a press release.
JetBlue said it has begun to terminate the contract, “a liquidation process that may happen in the approaching months.” JetBlue said it would “now focus much more on our proposed combination with Spirit.”
JetBlue’s deal to purchase Spirit got here after JetBlue and American launched the Northeast partnership. The NEA, approved in the ultimate days of the Trump administration, allows the 2 carriers to share passengers and revenue and coordinate flight schedules. American and JetBlue said they needed a deal to higher compete with big carriers like United AND Delta in crowded airports around Latest York and Boston.
But a federal judge ruled in May that the partnership was anti-competitive, ordering the 2 airlines to end their alliance.
American Airlines said Wednesday it will proceed to appeal the decision.
“JetBlue is an important partner and we are going to proceed to work with them to be sure that our mutual customers can travel seamlessly without disrupting their travel plans,” American said in a press release on its website.
An airline spokesman didn’t immediately say how American could salvage the deal if it wins the appeal if JetBlue plans to start rolling it up.
“We obviously respect JetBlue’s decision to focus on other antitrust and regulatory challenges.”
JetBlue said in a securities filing that it informed American on June 29 that it was dissolving the corporate due to the judge’s ruling. JetBlue said the termination would take effect on July 29.
JetBlue won the deal to acquire Spirit in July 2022 after a bidding war with a low-cost rival Frontier Airlines. JetBlue says it needs Spirit to grow and higher compete with the larger airlines that dominate domestic air travel. The combined carrier would change into the fifth largest within the country.
The acquisition of Spirit would give JetBlue access to more aircraft at a time when manufacturers are struggling to sustain with demand. It will also gain access to a whole bunch of pilots, who’re also missing.
From the outset, this deal faced a significant hurdle to gain approval from the Biden administration, which has promised to challenge deals it deems anti-competitive.
The Department of Justice filed a lawsuit to block the deal in March. “The JetBlue plan would eliminate the unique competition afforded by Spirit – and about half of all ultra-low-cost airline seats within the industry – and leave tens of hundreds of thousands of travelers facing higher fares and fewer options,” the lawsuit said.
Spirit shares were up greater than 2% in after-hours trading, while American and JetBlue shares were down lower than 1%.