Adds JetBlue statement, background in paragraphs 3-11

By David Shepardson

WASHINGTON, June 24 (Reuters) - Spirit Airlines on Tuesday urged the Transportation Department to reject a proposed JetBlue Airways JBLU.O and United Airlines UAL.O partnership, saying it was anticompetitive and will prompt large carriers to pursue similar deals.

United and JetBlue said in May their "Blue Sky" tie-up would allow travelers to book flights on both carriers' websites, while interchangeably earning and using points in their frequent flyer programs. Budget carrier Spirit said the deal would mean the smaller JetBlue "will become a de facto vassal of United."

"This anti-competitive tie-up involving a dominant legacy carrier will neutralize the competitive benefit of an existing low-fare competitor," Spirit said.

JetBlue said the filing "misrepresents Blue Sky and twists the facts about how JetBlue and United plan to deliver for customers."

JetBlue said the deal "does not include schedule coordination or revenue sharing. JetBlue and United will remain competitors as they each will continue to publish, price, and market flights independently under their own brand and flight numbers."

United declined to comment.

In March 2024, JetBlue and Spirit scrapped a $3.8 billion merger agreement after a U.S. judge blocked the deal on anti-competition concerns.

Spirit also said that if the partnership is approved, American Airlines AAL.O and Delta Air Lines DAL.N "will almost certainly seek similar arrangements and smaller carriers may feel compelled to go along, creating an even more highly concentrated industry."

American and Delta did not immediately comment.

Under the deal, JetBlue will provide United access to slots at New York's John F. Kennedy International Airport for up to seven daily round-trip flights, beginning in 2027.

JetBlue, the sixth largest U.S. carrier, and United will also exchange eight flight timings at Newark, New Jersey, and United will move some holiday and travel services to JetBlue’s Paisley platform.

JetBlue has been seeking partnerships after a federal judge blocked its Northeast Alliance with American Airlines in 2023.

JetBlue has been struggling to return to sustained profitability after the COVID-19 pandemic. It has managed to post a profit in just two of the past nine quarters.

(Reporting by David Shepardson; Editing by Franklin Paul and Leslie Adler)

((David.Shepardson@thomsonreuters.com; 2028988324;))