© Reuters.
Investing.com – Shares of JetBlue Airways Corporation (NASDAQ::) fell in pre-market trading Thursday after the carrier said it would not appeal a judge’s order to end an alliance with American Airlines Group (NASDAQ:).
JetBlue said in a statement on Wednesday that while it disagreed with the US court order, it had begun the process of ending the three-year alliance. The American said it “respects” JetBlue’s decision.
New York-based JetBlue said it would instead focus on its planned $3.8 billion merger. Spirit Airlines (NYSE:) – the largest in the US airline industry since the partnership between American Airlines and US Airways in 2013.
By terminating the US partnership, JetBlue argued that the US Department of Justice’s objections to the Spirit merger had become “entirely moot.” The Justice Department had previously sued to block the deal, claiming it would “lead to higher prices and fewer seats, hurting millions of consumers hundreds of ways.”
The Justice Ministry declined to comment to Reuters.
US District Judge Leo Sorokin ruled in May that JetBlue and America must terminate their partnership. Sorokin said that the so-called “Northeast Alliance,” which in effect allowed America to maintain a presence in New York while giving less lucrative routes to partners operating in these areas, was reducing competition “significantly.”
American described the ruling as “wrong,” adding that it would go ahead with an appeal. Shares of the company fell in pre-market trading on Thursday.
