American Airlines on Monday sued JetBlue for more than $1 million over payments related to the carriers' former Northeast Alliance partnership, according to a Texas Business Court filing. The exact amount of American's request was not disclosed.
The carriers had announced their partnership combining operations at Boston and three major New York area airports in July 2020. The U.S. Department of Justice, along with the District of Columbia and six states brought an antitrust lawsuit against the NEA in September 2021, the trial of which began in September 2022. By January 2023, JetBlue executives had said the partnership had become profitable. Judge Leo Sorokin, however, in May 2023 ruled that the NEA violated the Sherman Antitrust Act and ordered American and JetBlue to dissolve it.
American in its filing argued that the NEA's revenue-sharing arrangement, the Mutual Growth Incentive Agreement, was in effect between April 1, 2022, and July 18, 2023. The parties had agreed to an accounting process that calculated incremental revenue attributable to the NEA and allocated it between American and JetBlue, according to American.
Further, American said it sent JetBlue quarterly invoices between August 2022 and September 2023, and a final invoice for all remaining MGIA amounts due in January 2024. JetBlue on Feb. 5, 2024, sent American a calculation of the MGIA payment to which American was entitled, and the calculation differed by about 6 percent from American' calculation, according to the filing.
JetBlue, however, "has refused to make payment under the MGIA of either amount," according to American.
American on Monday evening released a copy of a memo sent to employees from vice chair and chief strategy officer Steve Johnson in which he said that the carrier had sued JetBlue after its talks over "recent months" to explore "an opportunity to further enhance our network by renewing a partnership with JetBlue" had ended. The parties were "unable to agree on a construct that preserved the benefits of the partnership we envisioned, made sense operationally or financially, or was consistent with the travel rewards and co-branded card business objectives that are so important to our strategy and our customers," he wrote.
JetBlue did not immediately issue a response to the lawsuit. When asked about it during a Tuesday morning earnings call, JetBlue CEO Joanna Geraghty only would say that "we pulled the same lawsuit from the docket that you pulled, and we haven't been served yet. I will say since the court order that terminated the NEA, we've been working with American to wind down the remaining aspects. This is not an unexpected turn."