Spirit attempts to block JetBlue–United Blue Sky tie-up, warns of ‘massive codeshare by stealth’
Spirit Airlines has filed a formal complaint with the US Department of Transportation (DOT), calling for an investigation into the JetBlue – United Airlines tie-up the partners are calling ‘Blue Sky’.
In a 12-page complaint submitted to the DOT on 24 June, the carrier argued that the partnership mirrors the anti-competitive nature of the American – JetBlue Northeast Alliance (NEA), which was dismantled in mid-2023.
The budget carrier accuses the two airlines of stifling competition under the guise of consumer convenience, and is calling for an extension to the review period and an opening of the agreements for public scrutiny.
What’s Spirit’s complaint about the Blue Sky partnership?
Spirit Airlines argues in its complaint that Blue Sky is just another NEA in disguise. It suggests that, regardless of the framing around the nature of the agreement, the effect on competition and fares will be just as damaging.
The complaint alleges that JetBlue will become a ‘vassal’ of United. At the core of this is the linking of loyalty programmes, which Spirit says will inevitably lead to network and pricing alignment between the partners.
Though not branded as such, the extensive interlining and mutual ticket sales are framed by Spirit as an ‘unprecedented massive codeshare.’ It argues that the practical effect will be the same as a system-wide codeshare, and therefore should be scrutinised as if it were.
“In short, this anti-competitive tie-up involving a dominant legacy carrier will neutralise the competitive benefit of an existing low-fare competitor (JetBlue), will raise fares, and will tend to weaken other value airlines, such as Spirit and others, by siphoning off customers attracted by access to the United loyalty program.”
The low-cost airline, which has recently emerged from its own bankruptcy restructuring, says that JetBlue and United combined would control 32% of the air traffic in the Northeast. Together, the pair would overtake Delta and American in Northeast dominance, controlling over a third of New York’s available seats.
Is Spirit right to question the JetBlue – United partnership?
Given it’s been only a year since the Spirit – JetBlue merger fell through, it might be tempting to think that this is sour grapes on the part of the low-cost. But some of its arguments do carry weight,
Blue Sky sees both brands retaining their legal independence, which regulators may see as less problematic than a merger. But Spirit’s complaint alleges it is coordinated consolidation by stealth, using alliances and loyalty schemes instead of M&A.
Avoiding M&A takes a bucket load of scrutiny out of the process. By ‘partnering,’ there is no automatic requirement for a DOJ antitrust review, no public comment and no court oversight unless a formal enforcement case is filed.
No assets are changing hands, so there’s no formal consolidation on paper. But Spirit says the partnership is a ‘de facto merger,’ particularly given the loyalty programme sharing proposed.
Critics may see hypocrisy in Spirit’s complaint — after all, it’s opposing the same kind of market behaviour it tried to benefit from during its own failed merger with JetBlue. However, while the allegations certainly contain an element of self-preservation, they also serve the public interest.
Spirit is calling for an extension to the review period of 60 days to allow the DOT to fully evaluate the implications of the partnership. It also wants the details of the Blue Sky agreement to be made public and opened up for comment.
The US DOT has the authority, under 49 U.S.C. § 41712, to investigate whether the partnership constitutes an unfair method of competition. However, this is a discretionary process, and the DOT has historically been less aggressive than the DOJ in antitrust enforcement.
Why JetBlue is desperate for a partner
Since inception, JetBlue has had ambitions to become a national competitor, but with a small fleet and limited network, partnerships and mergers have been viewed as the way forward, but it hasn’t had much luck.
Back in 2016, it lost out on the acquisition of Virgin America to Alaska Airlines. JetBlue had seen Virgin as a quick way to build a strong presence on the West Coast, but ultimately didn’t want to pay as much as its competitor did.
Its NEA partnership with American Airlines gave it access to slots and feed in New York and Boston. It held for three years after launch, but in 2023, District Judge Leo Sorokin ruled that the NEA was anticompetitive and must be unwound.
The attempted merger with Spirit would’ve allowed it to scale rapidly, but the DOJ sued to block the merger, calling it ‘a bad deal for travellers,’ The case went to court, but ultimately JetBlue lost, paying a $69 million break up fee to Spirit in the process.
Now Blue Sky is its latest attempt to plug into a global network and broaden its loyalty appeal.
JetBlue is struggling financially, posting a $795 million loss in 2024, and a further $208 million loss in the first quarter of 2025. Under pressure from both sides – outpriced by low-costs and out networked by legacies – Blue Sky was seen as the liferaft it needs.
After losing both the NEA and the Spirit merger to court battles, JetBlue may be looking for ways to get merger-like benefits without the same level of regulatory scrutiny.
Whether the DOT agrees that Blue Sky crosses the line from partnership into consolidation remains to be seen, but Spirit’s filing ensures the deal won’t fly under the radar.
