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JetBlue says it will end alliance with American to save Spirit merger deal

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JetBlue Airways announced Wednesday that it would comply with a U.S. judge’s May order to end its alliance with American Airlines.

The carrier said while it “strongly” disagrees, it would not appeal the court’s ruling.

JetBlue said it had informed American last week of its decision to terminate the three-year-old alliance, which allowed the two carriers to coordinate flights and pool revenue.

American said on Wednesday it still planned to appeal the ruling.

JetBlue said terminating its alliance with American renders “entirely moot” the U.S. Justice Department’s (DOJ) objections that led it to file suit to block its merger deal with Spirit, which would be the biggest in the U.S. airline industry since American and US Airways merged in 2013.

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“This decision will enable us to focus even more on our combination with Spirit,” CEO Robin Hayes said in a staff memo.

Andre Barlow, an antitrust attorney at Doyle, Barlow & Mazard PLLC, said he did not think that terminating the alliance would change JetBlue’s odds in its legal battle over the Spirit deal.

“I don’t think it helps,” Barlow said. “It’s even better for the DOJ.”

The alliance’s dissolution is a setback to American’s strategy to grow revenue by relying more heavily on alliance partners to ferry passengers in uncompetitive markets.

The “Northeast Alliance” with JetBlue helped American compete in the New York market, where it had been losing money. It allowed American to move away from unprofitable routes while maintaining a presence in New York and letting it feed traffic to its global partners who fly into the region.

By Rajesh Kumar Singh, David Shepardson, Diane Bartz – Reuters

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