JetBlue In Talks With United After Failed American Airlines Partnership

JetBlue Airways is reportedly in discussions with United Airlines about a potential partnership following the failure of its planned Northeast Alliance (NEA) with American Airlines, Forbes reports.

The collaboration, which aimed to combine operations in key Northeast US markets, was blocked by the US Department of Justice (DOJ) in 2021 on anti-competitive grounds.

The proposed Northeast Alliance was designed to expand the networks of both American Airlines and JetBlue in Boston and New York City, two of the busiest markets in the country. However, the DOJ intervened, arguing that the partnership would eliminate significant competition and essentially create a de facto merger between the two carriers in the region. Richard A. Powers, the Acting Assistant Attorney General of the DOJ’s Antitrust Division, highlighted that the alliance would have major consequences for consumers across the US, not just in the affected cities.

A federal judge sided with the DOJ in 2021, and despite efforts by both airlines to salvage the deal, they have been working to wind down the agreement since.

In 2023, American Airlines lost an appeal related to the NEA’s dissolution. Following this setback, the airline sued JetBlue for over $1 million to cover the costs incurred during the termination of the alliance. In an internal letter, American Airlines’ Vice Chair and Chief Strategy Officer Steve Johnson shared that while the airline had hoped to renew its partnership with JetBlue, the two companies could not reach an agreement that aligned with American’s business strategy, particularly its loyalty programs.

JetBlue’s CEO, Joanna Geraghty, downplayed the lawsuit during the airline’s earnings call, noting that it was not an unexpected development. She described it as part of the process of finalizing financial matters between the two companies.

JetBlue’s attention is now shifting toward a new potential partnership with United Airlines. According to multiple industry sources, the two carriers are negotiating terms that would focus more on extended network connectivity and alignment of their loyalty programs, avoiding the regulatory issues that led to the American Airlines alliance’s downfall. This shift reflects a more cautious approach, emphasizing collaboration in areas like flight routes and customer benefits without overlapping pricing strategies.

United’s focus on JetBlue aligns with its strategy to enhance its network in key markets, particularly New York City’s John F. Kennedy International Airport, where JetBlue holds a significant share of domestic flights. Currently, Delta Air Lines holds the largest market share at JFK, but JetBlue remains a key competitor, operating over 3,000 domestic flights from the airport.

In addition to the partnership discussions, there has been speculation in the industry about the possibility of United Airlines acquiring JetBlue. However, United has denied such rumors, with CEO Scott Kirby expressing reluctance to pursue the complexities of acquiring another airline just to gain access to additional routes at JFK. He noted that the regulatory hurdles associated with a potential acquisition would be too burdensome.