JetBlue decides not to appeal American Airlines alliance court ruling

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CHICAGO (Reuters) – JetBlue Airways (NASDAQ:JBLU) Corp said on Wednesday it will not appeal a U.S. judge’s decision in May requiring it to end an alliance with American Airlines (NASDAQ:AAL) Group.

The New York-based carrier said it will start unwinding the alliance to focus on its merger with Spirit Airlines (NYSE:SAVE).

U.S. District Judge Leo Sorokin in Boston on May 19 ordered JetBlue and American to end their “Northeast Alliance,” saying the partnership “substantially” diminished competition in the domestic market. American is the largest U.S. airline by fleet size and low-cost carrier JetBlue is the sixth largest.

American on May 31 announced that it would appeal Sorokin’s ruling – a position it reiterated on Wednesday.

The U.S. Justice Department sued in 2021 to undo the alliance announced the previous year. It called it a “de facto merger” of American and JetBlue operations in Boston and New York that removed incentives to compete and would end up costing consumers an additional $700 million a year to fly out of the region’s busy airports.

The alliance allowed the carriers to coordinate flights and pool revenue. It also was a big piece of American’s strategy to compete in the New York market, where it was losing money.

Since the partnership started, American has ceded domestic capacity out of New York to JetBlue. It has allowed American to move away from unprofitable routes while maintaining a presence in New York. The alliance also enables the airline to feed traffic to its global partners who fly into the region.