JetBlue says it will end a partnership with American Airlines in the Northeast after losing a court fight over the deal, and will instead focus on salvaging its proposed purchase of Spirit Airlines.
JetBlue Airways said Wednesday that it will not appeal a federal judge's ruling blocking the deal with American.
With its decision, JetBlue said the U.S. Justice Department should reconsider its opposition to a JetBlue-Spirit combination.
The Justice Department sued to block both the JetBlue-American deal and JetBlue's agreement to buy Spirit for $3.8 billion on grounds that they would hurt competition.
The Justice Department won a trial in Boston last fall over the JetBlue-American partnership. U.S. District Judge Leo Sorokin decided in May that the airlines must end their Northeast Alliance, or NEA, which began in 2021, because it violates U.S. antitrust law.
“Despite our deep conviction in the procompetitive benefits of the NEA, after much consideration, JetBlue has made the difficult decision not to appeal the court’s determination ... and has instead initiated the termination of the NEA, beginning a wind down process that will take place over the coming months,” New York-based JetBlue said in a statement. “We will now turn even more focus to our proposed combination with Spirit.”
Shortly after JetBlue's announcement, American said it respects JetBlue’s decision "to focus on its other antitrust and regulatory challenges," but it will press ahead with its own appeal in the case.
JetBlue's decision to choose a purchase of Spirit over a geographically limited deal with American grew more likely in recent weeks, as JetBlue declined to say whether it would appeal the Northeast Alliance ruling.
While the deal with American helped JetBlue grow in one region of the country, buying Spirit would let JetBlue grow quickly to nearly 10% of the nationwide air-travel market. That would make JetBlue much closer in size to United, Delta, Southwest — and American.
Last month, JetBlue and American asked Judge Sorokin to let them keep selling tickets on each other’s flights, an arrangement called code-sharing, and offering reciprocal frequent-flyer benefits. The judge has not ruled on the request, but those features of the NEA will now go away.
Meanwhile, a trial has been scheduled for October in the Justice Department's lawsuit against the JetBlue-Spirit merger. The government argues that consumers will suffer if Spirit — the nation’s biggest discount airline — is eliminated.
Savanthi Syth, an airline analyst for Raymond James & Associates, said JetBlue’s withdrawal from the deal with American marginally improves its chances to buy Spirit. She said JetBlue could point to the decision — and a conditional agreement to sell Spirit's operation at LaGuardia Airport in New York — as signs that it is trying to ease concerns about reduced competition.
Officials and power operators are bracing the public for blackouts caused by higher-than-average temperatures this summer. Utility officials in California and Arizona are warning of potential interruptions this summer due to the strain on energy supplies. Heat waves and drought conditions weaken power grids and available electricity reserves. This also makes hydroelectric power less reliable and raises the risk of wildfires.
Cisco DeVries, CEO of OhmConnect, joins Cheddar News to discuss.
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We are already starting to feel the effects of summer. Heat waves in Texas and California are already sending temperatures soaring. That could spell trouble for the nation's power supply. there are new concerns about outages in many areas of the country. Cheddar's Shannon Lanier explains the two main causes of blackouts, and what states are doing to keep the lights on and the air conditioning running.
Pinterest is making a big move as it pushes further into online shopping. The image-focused social media site is acquiring A.I.-powered shopping platform THE YES as it focuses on enhancing the user shopping experience. THE YES's technology gives users a personalized feed of products based on their preferences, and Pinterest is banking on the tech to give it an advantage among other social media apps with built-in shopping features. Julie Bornstein, founder and CEO of THE YES, joins Closing Bell to discuss the company's unique technology, why it agreed to sell to Pinterest, her vision as she takes over shopping initiatives, and more.
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Dann Ryan, Chief Investment Officer at Sincerus Advisory, discusses what drove markets lower on Wednesday, as well as what investors are anticipating when it comes to the upcoming CPI report and Fed decision.
