American Airlines Terminates JetBlue Talks, Files Lawsuit Over Failed Alliance

(American Airlines) -- In a message to staff on Monday, Vice Chair Steve Johnson stated that American Airlines has terminated negotiations for a collaboration with JetBlue Airways and has initiated legal action to seek compensation following the breakdown of the Northeast Alliance (NEA).

American Airlines was engaged in discussions with JetBlue to establish a new collaboration designed to bolster its route map and enhance its loyalty program. This move came after the collapse of the Northeast Alliance when a bench trial in May 2023 determined that the pact breached federal antitrust regulations—a ruling subsequently supported by a U.S. appellate court.

In the letter, American Airlines' Johnson stated, "Ultimately, we couldn’t reach an agreement on a structure that maintained the advantages of the partnership we had in mind, one that was feasible from both operational and financial perspectives."

In February, JetBlue mentioned they were still negotiating with several airlines to form an alliance and expressed their readiness to invest additional resources to finalize an agreement.

The NEA was unveiled in July 2020 and gained approval from the U.S. Transportation Department mere days prior to the conclusion of Republican President Donald Trump's initial term in January 2021.

This partnership enabled the two airlines to synchronize their flight schedules and split revenues, which was crucial for American Airlines’ plan to strengthen its position in the New York market, an area where it had previously seen losses.

On Monday, American Airlines announced that it has initiated legal action to recoup funds due from JetBlue after the dissolution of the NEA.

The company based in Texas is pursuing financial compensation exceeding $1 million, not including legal fees and expenses, from JetBlue, as stated in the lawsuit submitted to a Texas court.

JetBlue, in response to the lawsuit, said it has been working collaboratively with American to wind down the NEA since a court ruling deemed it anti-competitive.

"We plan to review American's complaint, and as this is pending litigation, we cannot comment further at this time," a JetBlue spokesperson said in an emailed response.

(Reporting by Bipasha Dey and Janaki Venugopalan in Bengaluru; Editing by Rashmi Aich and Sherry Jacob-Phillips)