Just three years after launching its “Northeast Alliance” (NEA) with American Airlines, JetBlue will terminate the agreement, beginning a “winding-down process” that will occur over the coming months. The airlines formed the “de facto merger” (so named by the Department of Justice) to share revenue while allowing the other to maintain its stronger presence in select cities.
In May, a federal judge in Boston ruled that the airlines must end their alliance, saying the move removed incentives for the airlines to compete and meant higher prices for consumers. U.S. Attorney General Merrick Garland, according to Reuters, said the decision was "a win for Americans who rely on competition between airlines to travel affordably." Garland said the Justice Department will continue to protect competition and enforce U.S. antitrust laws across industries, including the airline industry.
While American previously said it would appeal the court decision, JetBlue’s announcement on Wednesday, July 5, will end any future processes. In its statement, the airline said as a result of the NEA, it “increased capacity, added new routes and destinations, brought down fares, provided JetBlue-American flight connections that are a real alternative to Delta and United, and expanded the value of our loyalty program benefits to customers.
“For these reasons, we strongly disagree with the court’s ruling against the NEA and stand behind the procompetitive impact of the alliance.”
It continued, however: “After much consideration, 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.”
Shifting Focus Back to Spirit
Instead, the airline will shift its focus to its proposed combination with Spirit Airlines, which the Department of Justice (DOJ) had also previously tried to stop, according to Reuters. In March, the DOJ said the move "will lead to higher fares and fewer seats, harming millions of consumers on hundreds of routes."
In terminating its alliance with American, JetBlue seems to believe the move will help its case in acquiring Spirit. “Terminating the NEA renders the U.S. Department of Justice’s concerns about our partnership with a legacy carrier entirely moot,” the airline said in its statement. “With 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.”
Both measures by the DOJ come as part of President Joe Biden's stance against corporate consolidation, including the airline industry.
What it Means for Travelers
For customers who have travel booked with JetBlue and American, it’s important to note that nothing will change immediately, and they can feel confident in new and existing bookings for the coming months, said JetBlue. In addition, travelers can continue to earn/redeem points and receive reciprocal loyalty benefits.
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