JetBlue (NASDAQ: JBLU) issued the following statement regarding its Northeast Alliance (NEA) with American Airlines:
JetBlue’s unique model has successfully disrupted the industry for well over 20 years, and we decided to enter into the NEA as a creative solution to bring more of the JetBlue Effect to customers in New York and Boston, where our growth has been challenged by constraints outside of our control. By all measures, it succeeded. As a direct result of the NEA, customers benefitted from more of JetBlue’s low-fare, high-quality service than ever. We’ve 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.
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. We will now turn even more focus to our proposed combination with Spirit, which is the best and most effective opportunity to truly transform the competitive landscape in the U.S. and bring the JetBlue Effect to more routes and markets across the country.
As it relates to the Spirit combination, terminating the NEA renders the U.S. Department of Justice’s (DOJ) concerns about our partnership with a legacy carrier entirely moot. 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. 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 is a complex partnership with many thousands of customers who have already booked travel in the months ahead. For customers, it’s important to note that nothing will change immediately and they can feel confident in new and existing bookings for the coming months. In addition, customers can continue to earn/redeem points and receive reciprocal loyalty benefits. 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. 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.
With strong momentum, a clear organic plan, and the procompetitive Spirit combination on the horizon, we are ready to be a force for good in the industry on a more national scale and look forward to advancing our planned combination with Spirit.
