American Airlines Sues JetBlue After Talks to Resurrect Controversial Northeast Alliance End in Failure

American Airlines has confirmed that it has filed a lawsuit against JetBlue in a bid to recover money it says it is owed by the struggling New York-based carrier after talks to resurrect a controversial alliance in the Northeast ended in failure.

Just hours after aviation insider XJonNYC revealed on Bluesky and X that talks between the two carriers had broken down, American Airlines released an internal memo addressing “industry rumors and media reports.”

“In recent months, we had been exploring an opportunity to further enhance our network by renewing a partnership with JetBlue,” wrote American’s Vice Chair and Chief Strategy Officer Steve Johnson.

“Although we proposed a very attractive proposition to JetBlue and its customers and team, it became clear over time that JetBlue was focused on different business priorities,” Johnson continued.

“Ultimately, we 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.”

AA: "Recent talks to partner with B6 have gone kaput, so AA is on its own in NY for foreseeable future" (AA related, not an official quote -from- AA)

— JonNYC (@xjonnyc.bsky.social) 28 April 2025 at 23:09

The issues between American Airlines and JetBlue can be traced back to 2021, when the two carriers launched their Northeast Alliance to closely coordinate their flight schedules in the New York area to better compete with Delta and United Airlines in the region.

The Biden administration, however, took issue with the alliance, and the Department of Justice pursued a legal case, arguing that it was anti-competitive.

In May 2023, a federal judge sided with the DOJ and gave American Airlines and JetBlue just 30 days to wind down the alliance. Although both carriers said they disagreed with the ruling, only American Airlines attempted a legal challenge.

JetBlue focused on pursuing a takeover of ultra-low-cost carrier Spirit Airlines, but the Biden administration also challenged that deal, ending with another legal victory for the DOJ.

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Since then, JetBlue has been working out its next move, with rumors that the carrier has been considering a potential takeover by United Airlines. At the same time, it’s now emerged that JetBlue was in discussions with American Airlines about a possible alliance that might have had a better chance of succeeding under a Trump presidency.

Now that those talks are off, American Airlines says it wants JetBlue to pay it money that it claims it owed from the Northeast Alliance era.

Johnson told staffers on Monday: “We filed a lawsuit against JetBlue today to recover money owed to American following the unwinding of the Northeast Alliance. We understandably tabled this claim while we were in discussions with JetBlue, but now that those conversations have concluded, we need to address the accounting and reconciliation following the termination of the NEA.”

As for where American Airlines goes from here, Johnson struck an optimistic tone, saying the carrier is “intently focused on and are competing aggressively in New York and Boston.”

“Over the past year, we have added more than 20 new routes from LGA and JFK using the slots returned to us after the NEA ended,” Johnson continued.

Matt’s Take – Where Next For American Airlines and JetBlue in the Northeast?

The Northeast Alliance was always controversial, but American Airlines and JetBlue saw it as a necessary risk if they were to truly compete in New York against Delta and United Airlines.

American Airlines appears to have been focused on making the alliance work throughout all the turmoil, whereas JetBlue seems to flip-flop from one idea to the next.

Whether it be the proposed takeover of Spirit, rumors of a merger with United, and now reports that JetBlue had revived alliance talks with American Airlines, the embattled carrier seems to move from one idea to the next, without any of them being successful.