JetBlue Airways won’t appeal a federal court’s ruling that struck down a long-term partnership with Fort Worth-based American Airlines, instead focusing attention on a proposed merger with budget carrier Spirit Airlines.
In May, a federal judge agreed with government regulators that the Northeast Alliance between JetBlue and American violated antitrust law by reducing competition and leading to fare hikes. JetBlue told American Wednesday that it is “terminating the Northeast Alliance Agreement,” according to a government filing. JetBlue released a statement reiterating that it strongly opposes the court’s ruling, but won’t take further action.
“Despite our deep conviction in the procompetitive benefits of the NEA, 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, beginning a wind down process that will take place over the coming months,” JetBlue said in the filing.
American is still holding strong on its plans to appeal the ruling.
“We, of course, respect JetBlue’s decision to focus on its other antitrust and regulatory challenges,” American’s statement read. “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.”
JetBlue said it is refocusing on the proposed merger with budget carrier Spirit, a combination that was threatened by the ruling over the Northeast Alliance. JetBlue said the alliance with Spirit would “transform the competitive landscape.”
At this point, it’s unclear what will happen with the deal with Spirit.
“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,” JetBlue’s statement said. “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.”
The NEA ruling gave government antitrust enforcers a major win and struck a blow to the American-JetBlue alliance covering flights across the northeastern U.S.
American CEO Robert Isom testified in October that the carrier was hindered in markets like New York and Boston because of the head start that Delta Air Lines and others had as blockbuster mergers shrunk the industry over the last two decades.
Customers will not be immediately impacted by the ruling over the NEA, JetBlue’s statement reiterated. American also said it will work with JetBlue to ensure mutual customers do not experience any disruptions.
“We will continue to work through the legal process to achieve a wind down plan that protects consumers, and look forward to presenting our view to the court in the coming weeks,” JetBlue’s statement read. “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.”