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.
Proptech startup Juno recently raised $20 million in a Series A funding round. The company says the funds will be used to further its mission of building sustainable and affordable apartment buildings across the United States. Juno Co-Founder and CEO Jonathan Sherr joined Cheddar News' Closing Bell to discuss.
As President Joe Biden heads to Europe for the G20 and the United Nations COP26 climate meeting, he has announced a new $1.75 trillion spending framework. Senate Democrats are reportedly close to agreeing on passing the legislation, but it hangs in the balance as President Biden and other world leaders will meet at COP26 and Biden looks to proclaim the U.S. a leader on climate issues. Vox Senior Reporter Rebecca Leber joins Cheddar News' Closing Bell to discuss the $555 billion worth of clean energy initiatives Biden included in the framework, and how Democrats' continuing negotiations undermine U.S. climate leadership.
Huntington Bancshares Inc. reported Q3 earnings today. The bank holding company delivered a record $1.7 billion in revenue, but saw some pressure on its bottom line. The company says results were driven by its recent acquisition of TCF bank, as well as positive trends in areas like wealth management, capital markets, and card and payments processing. Cheddar News welcomes the chairman, president and CEO of Huntington Bancshares, Steve Steinour, to discuss.
While the Q3 GDP report showed just 2 percent growth for the U.S. economy, the National Retail Federation said holiday shopping totals could shatter previous records, giving a much-needed boost. Katherine Cullen, senior director of industry and consumer insights for the National Retail Federation, joined Cheddar to discuss some of the potential drivers of a Q4 shopping boom, including a surge in holiday gatherings after the pandemic had forced people to stay away from family in 2020 and financial stability within American households.
Solo Brands ($DTC), maker of steel wood-burning stoves and other outdoor brands, made its NYSE debut on Thursday. CEO John Merris stopped by Cheddar's "Closing Bell" to talk about the decision behind the IPO and the company's experience in direct-to-consumer retail and e-commerce. Merris said that after going public the immediate goal for the company is to focus on overseas expansion. "Internationally, there's been a lot of demand and chatter from our customers of wanting us to launch there," he said.
Boxing Legend Mike Tyson, Chief Brand Officer, of Tyson 2.0 and Chad Bronstein, Chairman of Tyson 2.0, joined Cheddar News to discuss venturing into the cannabis industry.
The CEO at Activision Blizzard Bobby Kotick apologized to employees after the company had been rocked by the public airing of sexual harassment claims that went unchecked. Kotick also asked that his compensation of more than $150 million be slashed to just over $62,000.
