JetBlue Airways has decided to terminate its long-term partnership with American Airlines after a federal judge ordered the companies to end the Northeast Alliance (NEA) following a 2021 lawsuit by the Justice Department alleging the agreement to be anti-competitive.
The airline had been considering an appeal of the ruling, but in a statement Wednesday, JetBlue announced it would not move forward with the case and instead focus on the proposed merger with budget carrier Spirit Airlines.
“We strongly disagreed with the court’s ruling,” stated JetBlue Airways. They further expressed that the “DOJ’s proposal is too onerous and overreaching, ignoring arguments the DOJ itself presented at trial about the benefits of similar aspects of other domestic carrier partnerships.”
In response to JetBlue’s decisions, USAir CEO Robert Isom testified in October that the carrier was hindered in markets like New York and Boston due to the head start that Delta Air Lines and its blockbuster mergers had over the past two decades.
American Airlines responded to JetBlue’s announcement with a statement of their own. “We, of course, respect JetBlue’s decision to focus on its other antitrust and regulatory challenges. At the same time, JetBlue’s decision and reasoning confirm our belief that the NEA has been highly pro-competitive and that an erroneous judicial decision disregarding the NEA’s consumer benefits has led to an anticompetitive outcome. American will therefore move forward with an appeal.”
The proposed merger between JetBlue and budget carrier Spirit is facing opposition from the Biden administration, who has vowed to challenge any deals they find to be harmfully competitive. The Justice Department filed a lawsuit in March to block the deal, making it a high hurdle to win approval.
JetBlue has argued that the combination with Spirit is necessary to grow and better compete against larger airlines that dominate domestic air travel, which would make them the country’s fifth-largest airline.
In response, JetBlue has stated that “the DOJ should reconsider and support our plan to bring a national low-fare competitor to the Big Four; the flying public deserves better than the status quo. The DOJ itself has acknowledged the benefits of JetBlue’s disruptive impact on the industry, and we are open to working with the DOJ to address any remaining concerns they have.”
Customers won’t be immediately impacted by the ruling over the NEA agreement, per JetBlue’s statement reassuring customers that American Airlines will “work with JetBlue to ensure mutual customers do not experience any disruptions.”
The termination of the NEA was a major victory for the government antitrust enforcers, as it struck a blow to the American-JetBlue alliance and increased competition as well as broader choices for travelers.
The wind-down process of the Northeast Alliance between JetBlue and American Airlines is expected to take place over the coming months.