US carriers American Airlines and JetBlue Airways will terminate their Northeast Alliance (NEA) at the end of July, breaking off their four-year-long bid to compete with dominant Delta Air Lines in the highly contested New York and Boston markets.
The court-ordered parting of ways will be made official on 29 July, JetBlue informed the US District Court District of Massachusetts on 10 July.
The parties are expected to submit by 19 July explanations of ”what, if any, impact that termination has on the proposed terms of the final injunction and judgement in this case or any other issue remaining before this court”, according to the filing.
The US Department of Justice (DOJ) had sued American and JetBlue in September 2021, setting up a trial held in Boston last year. In a 19 May ruling, a federal judge said the companies’ collaboration in the Northeast USA is unlawful and violates the Sherman Anti-Trust Act.
Rather than continuing to fight the case, JetBlue recently said that it would unravel the NEA following the court order to dissolve the alliance, which US attorneys said was harmful to competition in the region.
”JetBlue has made the difficult decision not to appeal the court’s determination that the NEA cannot continue as currently crafted, and has instead initiated the termination of the NEA, beginning a wind down process that will take place over the coming months,” the carrier said 5 July.
American, however, has vowed to continue fighting the court ruling, maintaining that the DOJ made “an erroneous judicial decision” and that the NEA has been ”highly pro-competitive”.
”American will therefore move forward with an appeal,” the Fort Worth-headquartered airline said on 5 July. “JetBlue has been a great partner.”
The alliance allowed American and JetBlue to intertwine their operations from New York and Boston by sharing revenue, coordinating schedules, codesharing and offering reciprocal benefits to frequent flyers.
New York-based JetBlue now plans to focus instead on its proposed $3.8 billion acquition of Spirit Airlines – the subject of a separate DOJ lawsuit set for another court trial in Boston starting 16 October.
Indeed, the carrier has seemed to place greater priority on purchasing Spirit, a deal it still hopes to close in the first half of 2024.
Last month, JetBlue entered a divestiture agreement under which it would give Spirit’s assets at New York’s LaGuardia airport to rival ultra-low cost carrier Frontier Airlines, provided that the deal with Spirit clears all regulatory and legal hurdles.
Spirit would transfer to Frontier six gates and 22 take-off and landing slots at LaGuardia airport as part of JetBlue’s “upfront commitments included in the merger agreement” – a major concession from JetBlue.
JetBlue now argues that, given the NEA’s recent collapse, the US government should “reconsider and support our plan to bring a national low-fare competitor to the Big Four” airlines of American, Delta, Southwest Airlines and United Airlines, it has said.
”We are open to working with the DOJ to address any remaining concerns they may have,” the airline adds.
