JetBlue and United Airlines in Merger Talks — But What’s the End Game?

JetBlue and United Airlines are reportedly negotiating the details of a merger that, if approved, will make the conglomerate one of the largest in the industry. Experts, however, are conflicted on what the end game is with this merger. Let’s look at what we know.

JetBlue and United Airlines Merger: A Question of Profitability

Sources familiar with the matter told Reuters that JetBlue and United Airlines are in discussions for a potential merger. According to the sources, the relationship with United is intended to be very different from that of the NEA. The two carriers will not cooperate on schedules and prices, they noted, even though the partnership is anticipated to concentrate on giving customers more connections and enabling them to accrue and use frequent-flier miles.

The sources warned that things could change, however, and stated that the two airlines have not finalized all the specifics yet. When asked for a response, a JetBlue representative cited comments made by Marty St. George, the airline’s president, during a conference call on Tuesday following the release of the company’s quarterly results.

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United stated that it does not respond to what it called “industry speculation.”

Following the COVID-19 outbreak, JetBlue has been having difficulty regaining consistent profitability. Only two of the last nine quarters have seen it turn a profit. This year, its shares have dropped almost 47%. Short interest in the company’s shares has increased by 35% since early February, indicating a negative attitude among investors.

Its suffering has worsened due to a decline in travel demand caused by the economic uncertainty of President Donald Trump’s trade war.

There has also been conjecture that JetBlue would be a possible acquisition target because of its declining market valuation. After speculation in the market that United was contemplating a bid for JetBlue, the Chicago-based airline was forced to declare to the U.S. Securities and Exchange Commission in January that it was “not in negotiations or discussions with any other airline regarding a merger, acquisition or similar strategic transaction.”

Previous Merger Was Killed in Appeals Court

Previously, JetBlue had filed to form a merger with American Airlines, but that merger was struck down in the U.S. Court of Appeals for the First Circuit in Boston last year.

In November 2024, the Boston-based U.S. Court of Appeals for the First Circuit declared that JetBlue and American Airlines’ Northeast Alliance, or NEA, was “anticompetitive.“

The Court maintained the earlier ruling that the NEA had violated federal antitrust laws. American Airlines, the largest airline in the U.S., and JetBlue, the sixth largest, were able to coordinate flights and split profits on routes that connected Boston and New York City after the NEA was established in 2020.

In May 2023, U.S. District Judge Leo Sorokin ruled that the alliance harmed competition and sided with the Department of Justice (DOJ) and six states that filed a lawsuit to stop the agreement.

In response to Sorokin’s ruling, JetBlue stopped the NEA. The airline was also dealing with other antitrust problems at the time, including a DOJ lawsuit that disputed its $3.8 billion offer to acquire Spirit Airlines. Subsequently, JetBlue abandoned its pursuit of Spirit.

American Airlines continued to challenge the NEA ruling, arguing that it unfairly barred the company from forming similar alliances for a decade.

Before the NEA, American and JetBlue were direct rivals on all shared routes, including 29 crucial flights to and from New York and Boston. These cities made up a significant portion of JetBlue’s operations, as 75% of its routes began or ended there.

Both carriers had significant market shares, with the four largest airlines controlling over 70% of the New York market and over 80% of the Boston market. Nonetheless, the appeals court maintained that by stifling competition in a critical sector, the NEA diminished incentives for price and service competition.