American Airlines Sues JetBlue After Partnership Negotiations Fall Apart

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

American Airlines was negotiating with JetBlue to form an alliance aimed at bolstering its route map and enhancing its rewards program.

"In the end, we couldn't come up with an approach that kept the advantages of the partnership we had in mind, nor did it work well from either an operational or financial standpoint," wrote American Airlines' Johnson in the letter.

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.

One major advantage of forming a partnership would be enhancing the value of JetBlue's loyalty rewards for customers, as the airline currently lags behind several rivals in this aspect.

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 first 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, from which it had previously been experiencing losses.

The NEA was disbanded following a bench trial in May 2023, which determined that the collaboration breached federal antitrust legislation; this decision was subsequently supported by a U.S. appellate court.

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 did not promptly reply to requests for comments.

(Reported by Bipasha Dey and Janaki Venugopalan in Bangalore; Edited by Rashmi Aich and Sherry Jacob-Phillips)