JetBlue says it can finish its partnership with American Airways to give attention to Spirit

American and JetBlue flights are preparing to depart Los Angeles International Airport on January 11, 2023.

Carolyn Cole | Los Angeles Times | Getty Images

JetBlue Airways said on Wednesday that it would end its partnership in the US Northeast with American Airlines after a federal judge ruled to block the agreement as the New York airline focuses on acquiring Spirit Airlines instead of this.

American said last month it would appeal the ruling against the JetBlue partnership, but New York-based JetBlue said Wednesday it would not appeal the decision.

“Despite our deep belief in the pro-competitive benefits of the NEA, JetBlue has made the difficult decision, after careful consideration, not to appeal the court’s decision that the NEA could not continue in its current form,” JetBlue said in a statement.

JetBlue said it has begun the termination of the agreement, “a winding-up process that will take place over the coming months.” JetBlue said it will now “be even more focused on our proposed combination with Spirit.”

JetBlue’s deal to buy Spirit came after JetBlue and American formed a partnership in the Northeast. The so-called Northeast Alliance, decided upon in the final days of the Trump administration, allows the two airlines to share passengers and revenue and coordinate flight schedules.

But in May, a federal judge ruled that the partnership was anticompetitive and ordered the two airlines to disband the alliance.

American Airlines said Wednesday it would appeal the verdict.

“JetBlue has been a great partner and we will continue to work with them to ensure our mutual customers can travel smoothly and without disruption to their travel plans,” American said in a statement on its website.

A spokesman for the airline didn’t immediately say how American might salvage the deal if JetBlue plans to begin dissolving it.

“We of course respect JetBlue’s decision to focus on its other antitrust and regulatory challenges.”

JetBlue won the deal to acquire Spirit in July 2022 after a bidding war with a low-cost competitor Frontier Airlines. JetBlue has argued that it needs Spirit to grow and better compete with larger airlines that dominate domestic air travel. The combined airline would become the fifth largest in the country.

Buying Spirit would give JetBlue access to more planes at a time when manufacturers are struggling to keep up with demand. It would also gain access to hundreds of pilots, which are also in short supply.

From the start, this deal faced major hurdles from the Biden administration, which has vowed to challenge deals it says are anti-competitive.

The Justice Department filed a lawsuit in March to block the deal, arguing that “the unique competition that Spirit offers – and about half of all ultra-low-cost airline seating in the industry – tens of millions of travelers with.” faces higher and lower fare options if the airline merges with JetBlue.

Spirit shares are up more than 2% in after-hours trading, while American and JetBlue are each down less than 1%.