JetBlue Begins Winding Down American Airlines Alliance

JetBlue Airways and American Airlines will begin winding down their alliance in the northeast in a week’s time, or on July 21. That’s when the carriers will stop taking new reservations under the pact, which a federal judge ruled violated U.S. antitrust law in May.

Existing itineraries that include American and JetBlue flights for travel after July 21 will be honored, but new bookings will not be made, New York-based JetBlue said Friday. Travelers can also accrue loyalty program points after that date as long as their either American AAdvantage or JetBlue TrueBlue number is on their reservation prior to the cutoff date.

“We are still committed to minimizing disruption to existing travel plans and continuing to deliver great value and our award-winning product and service to our customers,” JetBlue Vice President of the Northeast Alliance Dave Fintzen said.

The strategy, to stop taking new reservations but honor existing ones, is similar to the way American and US Airways integrated their reservations systems in 2014. The process is known as a “drain down,” where the number of existing bookings gradually drain out of the system as no new reservations are taken. The method avoided any major integration snafu when American and US Airways merged.

However, numerous details of how American and JetBlue end their alliance remain unknown. These include how JetBlue returns slots at the New York-area airports that it leased from American, how the airlines recover divested slots at Washington’s Reagan National airport, and potential gate relocations at certain airports.

JetBlue announced plans to end the alliance earlier in July. It cited a desire to focus on its proposed merger with Spirit Airlines for the decision. American, on the other hand, still intends to appeal U.S. District Court Judge Leo Sorokin’s decision. Sorokin has yet to set a deadline for the airlines to unwind their alliance, but has indicated that a request by the airlines for 120 days was “too long.”

The U.S. Justice Department has challenged JetBlue’s merger with Spirit, as it did the alliance. That case is scheduled to go to trial in October. Wall Street analysts generally see JetBlue’s decision to end its alliance with American as a positive for the proposed merger, though on the margin given the DOJ’s case against the deal.