JetBlue said not as committed to NEA, may help smooth approval for Spirit Airlines deal (update)

Sep. 15, 2022 5:29 PM ETSpirit Airlines, Inc. (SAVE), JBLU, AAL, ULCCBy: Joshua Fineman, SA News Editor19 Comments

Spirit Airlines Jet


Update 5:30pm: Adds JetBlue comment.

JetBlue (NASDAQ:JBLU) is reportedly not as committed to retaining the Northeast Alliance with American Airlines (NASDAQ:AAL) as the JBLU CEO has said in recent months in his battle to acquire Spirit Airlines (NYSE:SAVE), according to a Dealreporter item.

The update comes as the publication reported in the same article on Thursday that JetBlue's (JBLU) planned purchase of Spirit (SAVE) has received a second request from the DOJ, according to sources familiar.

Jetblue (JBLU) and American Airlines (AAL) are set to battle Sept. 26 in a hearing with the U.S. Dept. of Justice over an alliance the airlines announced in July 2020 over code sharing. JetBlue CEO Robin Hayes has argued during his battle with Frontier Group (NASDAQ:ULCC) to acquire Spirt Airlines (SAVE) that he's super committed to the alliance.

JetBlue (JBLU) responded to the Dealreporter story in a statement emailed to Seeking Alpha.

“We remain committed to the NEA and its substantial benefits for customers in the Northeast," JetBlue said in the statement. "The NEA is a completely separate matter from the Spirit transaction, and we do not believe it will have any effect on our ability to achieve regulatory clearance. The NEA is already delivering benefits and we look forward to presenting our case in court this month.”

The government is asking for the court to order the airlines to end their Northeast Alliance partnership in an action aimed at improving competition in the Northeast part of the U.S.

If the DOJ wins its attempt to block the alliance, it may actually be a victory for Jetblue's (JBLU) planned purchase of Spirit (SAVE) as it will make the companies arguments for a merge stronger, Dealreporter said, citing sources familiar.

The agreement between American and JetBlue was inked in 2020 allows the airlines to sell each other's flights in their New York-area and Boston networks. The airlines will also link their frequent flyer programs as part of the arrangement.

On Monday Spirit (SAVE) set its holder vote for its sale to JetBlue for Oct. 19.

JetBlue (JBLU) is scheduled to present at a Morgan Stanley conference in Laguna on Friday.

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