JetBlue Airways (NASDAQ:JBLU) announced it will comply with a US judge's order from May to terminate its alliance with American Airlines Group (NASDAQ:AAL) to safeguard its planned $3.8 billion acquisition of Spirit Airlines.
While JetBlue expressed strong disagreement, the company stated that it will not appeal the court's ruling.
The two airlines had entered an alliance, known as the Northeast Alliance, to allow them to coordinate flights and pool revenue.
American Airlines intends to appeal the ruling, according to reports. The alliance helped American Airlines compete in the New York market and feed traffic to its global partners.
JetBlue's decision to end the alliance renders the objections raised by the US Justice Department over the Spirit merger deal "entirely moot."
JetBlue made a move to acquire Spirit Airlines in early 2022, but the US Justice Department filed a lawsuit to block the deal, citing concerns about the negative impact on competition.
In May 2023, a US District Judge ruled that the airlines must terminate their Northeast Alliance (NEA) that began in 2021 due to violations of US antitrust law.
Shares of JetBlue were around 1.8% lower ahead of the opening bell Thursday, while American’s shares had sunk around 1.1%.
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