JetBlue Courts New Domestic Partner As American Signals End With Suit

JetBlue Airways believes it is on the verge of announcing a new domestic airline partner as it moves beyond the now-shuttered northeast alliance (NEA) with American Airlines.

Though a federal ruling left the door open for a more limited version of NEA, American has “concluded” its conversations with JetBlue and filed suit against the LCC to recoup costs. Despite attempts to renew a partnership, agreement could not be reached on “a construct that preserved the benefits” of what was envisioned, American said. “Although we proposed a very attractive proposition to JetBlue ... it became clear over time that JetBlue was focused on different business priorities,” wrote American Airlines Chief Strategy Officer Steve Johnson in a letter released April 29.

Since a court order terminated the NEA, American and JetBlue have been working to wind down remaining aspects. “This is not an unexpected turn,” JetBlue CEO Joanna Geraghty said in reaction to the suit, on a same-day earnings call. “It’s part of just truing up any monies owed between the parties,” she told investors.

Over the past several months as American pursued an appeal of the federal ruling solo, JetBlue has repeatedly voiced interest in a new airline partnership and described ongoing talks with multiple airlines. Its multi-year plan to return to sustained profitability, JetForward, accounts for some level of partnership in the future.

Declining to elaborate on any specifics, JetBlue’s CEO said the potential new airline partner “drives more [value] for JetBlue than other carriers that may have been in the consideration set.” As far as scale, prior guides fall short of the mark, said JetBlue President Marty St. George. “We do have a number in JetForward for partnerships—it is a number that does not assume a partnership of this size,” he told investors on the first quarter (Q1) earnings call. Looking to offer more destinations and frequencies, an expanded ability to “earn and burn” loyalty points is also a key consideration of the partnership, he noted. “That means, for example, today if you are a customer in the northeast and you love JetBlue for leisure but twice a year you have to go to Omaha or Boise, these are places that you can’t earn TrueBlue points on now, and when this partnership goes forward, you will be able to,” St. George said.

JetBlue expects to announce a new domestic airline partner in the second quarter (Q2).

The New York-based carrier is the first LCC to report 2025 Q1 earnings amid a softened demand environment that has prompted U.S. airlines to pull full-year guides and cut capacity. For JetBlue, Q2 available seat miles (ASMs) are expected to be nearly five points below prior expectations, reductions heavily focused on trough periods. “The relatively strong booking trends we saw throughout January deteriorated into February and worsened further in March [and] as we look to the second half of the year the outlook remains unpredictable,” Geraghty said. Despite relative stability observed in recent weeks, JetBlue continues to see impacts on consumer sentiment and travel demand, particularly in off-peak periods.

Citing data from MasterCard, the carrier believes travel cuts are somewhat regionally focused, particularly in the northeast and, to a lesser extent, the West Coast. “I would not do something as simple as to say this is a ‘red’ versus ‘blue’ recession ... but it does seem like the coasts seem to be impacted a little bit more, and frankly, it’s really what’s driven our capacity strategy,” added St. George.

JetBlue is also watching for any potential tariff impacts on fleet. The carrier expects delivery of 18 Airbus A220s and three A321neos in 2025. Three deliveries will come from Germany, “and we’re essentially exploring all of our options on how to mitigate that impact,” CFO Ursula Hurley said. JetBlue will also “continue to evaluate the industry-wide tariff exposure outside of aircraft purchases, focusing on spare parts as well as repairs happening abroad,” she noted.

Given the current environment, the LCC will look to better align resources, eyeing reductions in non-essential hiring and exploring adjustments to its fleet plan. It will likely draw back on plans to extend 30 A320 family aircraft, citing the expense of necessary interior work and maintenance shop visits. Plans to retire its Embraer E190 fleet by the end of the summer remain on track.

Meanwhile, improvements in geared turbofan (GTF) engine-related aircraft groundings are proving hopeful for what has been a significant headwind for the LCC. Currently, JetBlue has 10 related aircraft on ground (AOG), below expectations of the mid-to-high teens. Engines are now staying on-wing longer, shop turn times are slightly faster, and Pratt & Whitney supply chain constraints are improving, the carrier said. Discussions with the engine OEM regarding compensation are ongoing.

“We’re very pleased with the progress we’re seeing,” Hurley said of the GTF constraint. “When we do get on the other side of this macro backdrop ... this will be a tailwind for JetBlue.”

In Q1, JetBlue reported total operating revenues of $2.1 billion, down 3.1% year-over-year, on a 21% decrease in operating expenses. The airline reported a net loss of $208 million for the quarter, improved from its $716 million net loss in Q1 2024. Though it observed weakness across its domestic network, international flying delivered relatively stronger performance. JetBlue’s transatlantic RASM grew 28% year-over-year on 25% fewer ASMs during Q1. Loyalty revenue was up 9% year-over-year, and co-brand spend grew 7%.

JetBlue joins a growing list of U.S. carriers in pulling full-year guidance amid uncertainty. In Q2, it expects capacity to dip by 0.5-3.5% year-over-year, projecting RASM to fall by 3.5%-7.5% versus the year-ago quarter. CASM ex-fuel is forecast to increase 6.5%-8.5% over Q2 2024. Continuing to closely monitor conditions, JetBlue is evaluating additional capacity reductions. The airline remains encouraged by the resilience of premium, international, and loyalty revenues.

“Frankly, I remain optimistic that this is a transitory situation that we’re in right now,” St. George told investors. “I’ve been through so many financial crises and recessions before. This is different, it’s an exogenous factor driving it, and I think that exogenous factor could change relatively quickly. So, we’re going to remain optimistic, and I think the best guidance I can give you is, we will react to the demand we’re seeing at the time.”