By Kimberley Kao

American Airlines is suing JetBlue Airways to recover money owed after partnership talks with the carrier ended over business differences, potentially clearing the runway for its rivals to pursue alliances with JetBlue.

American Airlines Vice Chair Steve Johnson said Monday that while it made "a very attractive proposition to JetBlue...it became clear over time that JetBlue was focused on different business priorities."

The Fort Worth, Texas-based carrier said it has also filed a lawsuit to recover money owed by JetBlue following the termination of their previous partnership, 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," said Johnson, who is also chief strategy officer.

American Airlines and JetBlue formed their Northeast Alliance in 2020, agreeing to work together across three New York-area airports and in Boston. Ultimately, however, a federal judge in 2023 ruled in favor of the U.S. Justice Department's effort to unwind the partnership, finding that their arrangement suppressed competition in key Northeast markets.

The end of talks to revive the tie-up with American Airlines could give JetBlue more room to seek partnerships with other carriers.

JetBlue Chief Executive Joanna Geraghty said in the company's fourth-quarter earnings call in January that the airline has been "having conversations with a number of carriers...to discuss the potential for future partnerships."

The New York-based airline has been facing pressure from mounting competition and a growing number of issues that weighed down its revenue guidance provided in January, analysts said then. JetBlue's guidance didn't measure up to more upbeat outlooks offered by competitors United Airlines and Delta, sending its stock spiraling. Shares are down 48% this year.

JetBlue didn't immediately respond to a request for comment. The carrier will report its first-quarter results on Tuesday.

American Airlines last week withdrew its full-year guidance after domestic travel demand declined in the first quarter. It posted a loss of $473 million for the period, while revenue edged lower to $12.55 billion.

Write to Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

April 29, 2025 01:37 ET (05:37 GMT)

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