American And Jet Blue One will stop selling seats on flights next Friday, two months after a federal judge ruled that the Northeast airline partnership violated antitrust laws.

The judge ordered the airlines to end their partnership of more than two years, which allowed them to share passengers and revenue, and coordinate schedules in the northeastern United States. Delta And united In busy airports serving New York and Boston.

The Department of Justice, six states, and the District of Columbia sued to block this partnership, winning their case on May 20.

““We are disappointed to end popular benefits such as codeshare and mutual loyalty benefits,” Dave Fintzen, JetBlue’s vice president of Northeast Alliance, said in a statement. With the recent court ruling and the termination of the NEA, we have to go down I say in short order.”

JetBlue said last week it would not appeal the ruling, so it could focus instead on its $3.8 billion acquisition. Spirit Airlines, a deal also challenged by the DOJ, though JetBlue said it did not agree with the judge’s ruling on the Northeast alliance. However, America said it still plans to appeal the ruling on the Northeast Alliance.

Earlier this week, airline websites still offered flight options on each other’s airlines during the year-end holidays, but those sales will only last through July 20.

Both airlines said they will work with customers who have existing reservations so that their plans are not disrupted.

“This is only the first step in the truce process that will take place over the coming months,” American said in a statement. “We will continue to work with the JetBlue team to ensure that customers with existing codeshare reservations can travel smoothly without disrupting their travel plans.”

Thursday is also the last day customers can use their American AAdvantage frequent flyer miles to book flights on JetBlue.

Flight disruptions piled up at airports across the country ahead of the Fourth of July weekend, but airline investors have largely ignored it.

More than 63,000 flights operated by US airlines, or 30% of their schedules, have been delayed between June 24 through July 2. More than 9,000 flights have been cancelled, or 4.2%. Both percentages are above the averages for turbulence so far this year, according to flight-tracking website FlightAware.

On Tuesday, disruptions eased with nearly 2,500 US flights delayed, half the number that were delayed on Monday, though thunderstorms continued to disrupt flights at major airports such as Newark and Denver.

The recent delays have been mostly driven by a series of rolling storms along with other issues such as a shortage of air traffic controllers in the crowded airspace around New York and other areas, which has derailed the travel plans of thousands of customers. An end to what was mostly a quiet spring for travellers.

But very high travel demand continues to keep airline stocks higher, With many reaching multi-year highs.

The Transportation Security Administration said it screened nearly 2.9 million people on Sunday, a record for a single day. It is the clearest sign yet of the continued demand for air travel, as passengers book flights or collect rewards points and make up for lost time after the Covid pandemic halted flights.

American Airlines And Delta Airlines It recently raised its earnings forecast thanks to strong bookings. Lower fuel prices than a year ago continue to be a tailwind for the industry, too.

The airlines publish second-quarter results and will provide full forecasts for the summer starting in mid-July, reports that are likely to include the financial impact of the late-June and early-July disruptions.

The gains in stocks of major US airlines this year have far outpaced the broader market.

United Airlines Both Delta are up 46% so far this year through Monday, while American Airlines is up 42%. For comparison, the Standard & Poor’s 500 It gained 16% over the same period. Delta and United recently touched their highest levels since June 2021.

Southwest Airlineswhose collapse at the end of 2022 led to a first-quarter loss, it’s up 10% this year.

Even during the past week, as travel chaos hit operations, several airline stocks topped the S&P 500. United Airlines was an exception. Its stock fell 1.7% as the carrier struggled to stabilize its business while storms continued to pass through its hub at Newark Liberty International Airport.

From June 24 to July 2, United had the highest number of delays for US airlines, accounting for 42% of its major airlines’ schedule, according to FlightAware.

At the beginning of last week, the FAA lowered the departure rate in Newark, CEO Scott Kirby said, leading to a backlog of delays. When planes can’t leave, arriving flights have nowhere to park, so turbulence can easily build up.

“Airlines, including United, are simply not designed to have their largest hub and capacity severely limited for four consecutive days and still operate successfully,” Kirby said in a note to employees this weekend.

He said the airline would have to reduce its schedule in Newark, especially during spring and summer thunderstorms to avoid crowds unless there was more capacity at the airport.

Thunderstorms are difficult for airlines because they can appear with little warning and are more difficult to predict than other types of weather such as hurricanes or winter storms.

More often than not, airlines will delay flights waiting for thunderstorms to clear and airspace to open, but crews can hit federally mandated workday limits, adding to the disruptions.

David Neilman, Founder and Former CEO, Inc JetBlue Airways And the chief executive of Breeze Airways, said there’s not much an airline can do when there are such steep cuts in airline access fares.

He said airlines could cancel preemptively just for the weather to improve.

A federal judge ordered Friday American Airlines And JetBlue Airways To end their partnership in the Northeast, the Department of Justice won after it filed a lawsuit to back out of the alliance, arguing that it was anti-competitive.

The lawsuit, filed in September 2021, alleged that the airline alliance was effectively a merger that would harm consumers by increasing fares. The trial began a year later in Boston and concluded in December.

Both airlines expressed disappointment at the decision and said they were considering next steps.

“It makes the two partner airlines, each with a vested interest in the success of their joint and individual efforts, rather than active, long-armed competitors who regularly challenge each other in the competitive market,” said US District Judge Leo Sorokin. rolling.

Fort Worth, Texas-based American Airlines and New York-based JetBlue Airways have argued that they need a so-called Northeast Alliance to better compete with other major carriers such as Delta Air Lines and United Airlines at the region’s crowded airports.

“Whatever benefits to American and JetBlue from becoming more powerful—in the Northeast generally or in their shared rivalry with Delta—those arise from an explicit agreement not to compete with each other,” Sorokin wrote. “Such an agreement is just the kind of ‘unreasonable restraint on trade’ that the Sherman Act is designed to prevent.”

He ordered the airlines to terminate the partnership 30 days after the ruling. Carriers are likely to challenge the decision. A JetBlue spokeswoman said the company is studying the decision and evaluating next steps.

“We are disappointed with the decision,” the spokesperson said. “We made it clear during the trial that the Northeast Alliance was a huge win for customers. With NEA, JetBlue was able to grow exponentially in restricted Northeast airports, bringing airline fares and great service down more ways than would otherwise have been possible.” Unlike that “.

“The court’s legal analysis is clearly incorrect and unprecedented for a joint venture such as the Northeast Alliance,” an American Airlines spokesperson said in a statement. “There was no evidence on record of any consumer harm from the partnership, and no legal basis for inferring harm simply from the fact of the collaboration.”

Undoing the partnership will be difficult, especially during the height of the summer travel season, when airlines have already sold out.

JetBlue and American are not allowed to coordinate fares under the partnership, which was approved in the waning days of the Trump administration in 2021 and has since expanded.

JetBlue previously warned in the securities filing a judgment against NEA that “could have an adverse effect on our business, financial condition and results of operations.”

“In addition, we incur costs associated with carrying out NEA’s operational and marketing elements, which will not be recoverable if we are required to dispose of all or a portion of NEA,” the company said.

The Justice Department did not immediately respond to a request for comment.

The department separately in March filed an antitrust lawsuit to block JetBlue’s proposed acquisition of the low-cost carrier Spirit Airlinesarguing that the deal would lead to an increase in prices, “harming cost-conscious publications even more acutely”.

The combination faces a major hurdle to gaining approval from the Biden administration, which has vowed to take a hard line against what it views as anti-competitive deals.

Boeing It warned Thursday that it will likely have to scale back deliveries of its 737 MAX jet in the near term due to a problem with a part by the supplier. Soul Aviation Systems.

Boeing said its supplier told the company that a “non-standard” manufacturing process was used in two assemblies in the rear fuselage. It said the problem affects the 737 Max 8, the airline’s most popular model, including customers American Airlines And Southwest Airlines. It also affects the 737 Max 7, 737 8200 and P-8 aircraft.

Boeing said the problem is not “an immediate flight safety issue and the fleet in service can continue to operate safely.”

The company said Boeing has notified the Federal Aviation Administration of the problem and is working to inspect and remediate the fuselage as needed. The FAA said Boeing brought it to the attention of the matter and also said there was no immediate safety issue.

However, the problem is likely to affect a significant number of 737 MAX aircraft that have not been delivered, either in production or in storage.”

“We expect 737 MAX deliveries to decrease in the near term while this required work is completed,” Boeing said in a statement. “We regret the impact of this issue on affected customers and are in contact with them regarding the delivery schedule.” “We will provide additional information in the coming days and weeks as we better understand the effects of delivery.”

The problem, the latest in a series of production issues, is plaguing Boeing as it strives to ramp up production and deliveries of its best-selling jet while customers wait for new planes to take advantage of the upturn in travel. Boeing will likely brief investors on the issue during its annual shareholder meeting, scheduled for Tuesday.

Boeing shares fell 5 percent on Friday. Spirit AeroSystems shares fell 20%.

Spirit manufactured some of the airframes used in Boeing’s planes and said in a statement that it had notified Boeing of a “quality problem” with some 737 models.

“Spirit is developing an inspection and repair of the affected fuselage,” the company said. “We continue to coordinate closely with our customers to resolve this issue and minimize impacts while maintaining our focus on safety.”

It is the latest production problem for Boeing and its customers. Boeing earlier this year paused deliveries of its 787 Dreamliners for several weeks to address a data analysis flaw, and in 2021 and 2022 it suffered other production defects on its wide-body jets that halted deliveries for several months.

On Tuesday, the company announced deliveries of 64 aircraft in March, the highest number since December, amid an industry-wide shortage of new aircraft.

Airline executives have cited supply constraints on aircraft as among the main challenges in ramping up flying ahead of the peak travel season.

“We are aware of the issue and are working with Boeing to understand how it may affect our Max shipments,” an American Airlines spokesperson said in a statement.

Southwest said in a statement that it expects the issue to affect the delivery schedule for the new MAX aircraft and that it is discussing details of that schedule for this year “and beyond.”

United said they did not expect any “significant impact” on their capacity plans this summer or the rest of 2023.

— CNBC’s Leslie Joseph and Phil LeBeau contributed to this report.

NEWARK, N.J. — Faced with crowded airports, rising costs, a shortage of pilots, and a resurgence in travel demand, airlines are increasingly turning to the same remedy: bigger planes that hold more passengers.

The 11 largest US airlines averaged more than 153 seats last year on domestic flights, up from about 141 in 2017, according to flight data firm Cirium. In April, US airlines took 0.6% more seats into their domestic schedules than in the same month in 2019, despite operating 10.6% fewer flights.

The trend toward larger planes, part of a strategy known in the industry as “upgrading,” means airlines can sell more seats per flight and settle for fewer planes, which are in short supply. While more passengers per plane lowers unit costs for airlines, that means fewer flight options for consumers.

For example, United Airlines It said its flights have 20 more seats per flight in its full network than in 2019.

Rodney Cox, United’s vice president of airport operations at the carrier’s hub at Newark Liberty International Airport, told CNBC last month that it’s difficult to increase the number of flights to and from the airport, which is one of the largest in the country. not crowded.

“The way we continue to grow our model and grow the business is to upgrade our flights,” he said.

United said last month it would fly about 3,600 domestic routes using wide-body aircraft. The airline has also designated the 777, the largest plane in its fleet with 364 seats, to fly between major hubs and Orlando, Florida, during spring break, a spokeswoman said.

Early in the Covid pandemic, US airlines reallocated their largest planes to domestic routes when international travel was hampered by the crisis and travel restrictions. Now that international flights are starting to pick up, the competition for those planes is even more intense.

Cox noted that there are limits to the number of flights an airline can increase, especially with its larger aircraft.

“Not every gate is equal,” he said. “You can’t put on a wide body [airplane] on each gate.

The trend towards larger planes It is becoming increasingly important during what airline executives expect to be a busy spring and summer with shortages of pilots, air traffic controllers and new aircraft.

United Cox vice president said keeping the operation running smoothly in busy Newark is key. If the planes don’t take off fast enough on schedule, he said, because of the limited number of gates, “you’ll see it turn into a parking lot.”

Airlines and federal officials have agreed to curtail flights in hopes of avoiding a repeat of this summer’s flight cuts and schedule delays at the busy airports serving New York and Washington, DC.

Last month, the FAA said it would allow airlines to cut back flights at airports serving New York City and Washington’s Reagan National Airport as a way to avoid disruptions.

American Airlines He said that in response to the FAA-sanctioned slot waivers, he will temporarily reduce frequencies on select routes from LaGuardia Airport and Newark this summer.

“We are proactively engaging with affected customers to provide alternative travel arrangements,” a spokeswoman said. The airline plans to reallocate aircraft from the reduced frequencies to routes at its hubs at Dallas-Fort Worth International Airport, Chicago O’Hare and Philadelphia International Airport.

United Airlines said in a statement Thursday that in response to the FAA’s plan, it will reduce peak daily flights in New York and Newark from 438 to 408 and reduce service from the New York area to Washington, DC. The company said it still plans to operate 5% more seats at those airports compared to the same month in 2019 and expected less than 2% of customers to be affected.

Delta AirlinesThe chief operating officer also told the FAA that the airline intends to obtain waivers that would allow it to reduce flights.

The FAA said it expects “airlines to take measures to minimize the impacts on passengers, including operating larger planes to carry more passengers and ensuring that passengers are fully informed of any potential disruptions.”

Even so, some airlines are facing challenges in switching to larger planes. JetBlue Airwaysfor example, all narrow-body aircraft operate.

“We don’t have 70 seats that we can turn into 150[-seater]Robin Hayes, CEO of JetBlue, told CNBC last week. And even the airlines that do, you’re just taking seats from somewhere else. “

In addition, the airline does not contract with regional carriers for as many of its flights as the major US carriers.

“This will have a very significant financial impact on JetBlue and our customers,” Hayes said of the reduced capacity. “Small communities always have a disproportionate impact on that.”

To help increase the number of passengers per plane, United and other network carriers are also working to reduce their reliance on regional feeder airlines, where pilot shortages are acute and unit costs high.

Delta said 70% of its domestic flights this year are operated by the main carrier, up from 55% in 2019. Seats per flight increased by 15 from 2019, a spokesperson told CNBC.

Delta has also shifted from regional to mainline aircraft such as Airbus A320s and Boeing 737s on traditional business routes such as Boston to Chicago, Seattle to San Francisco, and Los Angeles to Las Vegas. A spokesperson said it has completely canceled regional flights to Las Vegas, Houston, Dallas/Fort Worth and San Antonio, Texas, and replaced them with larger ones.

Some major airlines have suspended services to some smaller airports, citing a shortage of pilots for regional airlines. America last year left cities including Dubuque, Iowa, and United recently said it would stop flying to Erie, Pennsylvania, in June. Delta also said it would pause service at State College, Pennsylvania, and La Crosse, Wisconsin that month.

Faye Malarkey said reducing regional flights instead of mainline flights “could cut departure options in half for travelers, meaning long layovers, longer journey time and cost burdens, but it could also mean that one city it previously served could not be served.” “. Black, president and CEO of the Regional Airline Association.

“This is additional harm to small communities who don’t have passengers to fill on larger planes,” she said.

– CNBC Gabriel Curtis Contribute to this article.

American Airlines It is throwing away the traditional frequent flyer rewards graph as the carrier moves toward dynamic mileage redemption pricing, the latest shift in its lucrative loyalty program AAdvantage.

Starting late Wednesday, the carrier will publish starting levels for the number of frequent flyer miles likely to be required to redeem a ticket in certain regions — for example, 7,500 for a one-way ticket within the 48 contiguous US states and Canada. Previously, the chart showed stable recovery levels.

American said in December that it would get rid of its various redemption categories, MileSAAver and AAnytime Awards, which set minimum rates. The new redemption level will be called Trip Awards and the chart will act as a reference guide.

“Just like cash tickets, they will be rolled out based on demand,” Chris Isaak, director of American Loyalty, said in an interview.

American introduced dynamic award ticket pricing in 2019, which means the number of miles required to redeem a ticket fluctuates based on supply and demand.

“It became the product our members gravitated towards,” Isaac said. This category requires the same number or fewer award miles that are set in the ‘Up’ chart 85% of the time over the past few years.”

Previously the scheme looked like this:

It will now look like this:

Award tickets on American Airlines and others can also vary based on the time of year.

For example, it costs 126,000 frequent flyer miles for a round-trip ticket in standard economy in America between New York and Rome between June 1 and June 8, during peak season, but only 89,500 miles from October. From 1st to october. 8, during the season of low demand.

“What I think is good about this is, it brings the awards map in line with where Americans are today [travelers] Henry Hartfeldt, founder of Atmosphere Research Group, a travel industry consulting firm, said that an award ticket would cost them a certain number of miles is no longer accurate.

United Airlines On Monday, he said new technology would open up more seats on his flights so kids can sit with an adult in their party without paying a fee, a type of fee that has been scrutinized by the Biden administration in recent months.

United will show parents or other adult travelers accompanying a child under 12 years of age access to the Preferred seats in addition to the regular economy seats, if required, at the time of booking so they can be seated together.

The change applies to travelers with basic and basic economy tickets and will be in full effect next month, although United has already increased some available seats.

The airline will also not charge customers a fare difference if they switch to the same destination that has adjacent seats.

In recent years, airlines have charged passengers to reserve seats in their “preferred” location on flights. They do not come with extra legroom or other benefits but are often in front of the aircraft, although they can cover a large number of aircraft seats.

President Joe Biden called on lawmakers to “expedite the ban on family sitting fees,” the White House said earlier this month. In July, the Department of Transportation required US airlines to “do everything they can” to ensure that passengers under 13 are seated alongside an adult companion at no additional charge.

“Baggage fees are bad enough,” Biden said during his State of the Union address earlier this month. “Airlines can’t treat your child like a piece of baggage.”

These seats usually vary in price. On a round trip between Newark, NJ, and Los Angeles in August, preferred seats on a United flight were offered at $37 each way for one person.

Delta Airlines She said she is blocking certain rows of seats so families can sit together.

“Delta does not charge a family seating fee and regardless of the class of tickets purchased, will always work with customers on a case-by-case basis to ensure that their family seating needs are met,” a Delta spokesperson said in a statement Monday.

American AirlinesThe booking platform will automatically search for available seats together at the time of booking for the main cabin and basic economy passengers. A CNBC spokesperson said preferred seats and the extra legroom section, Main Cabin Extra, open the day of departure if needed.

Delta AirlinesFourth-quarter earnings beat analysts’ expectations, and its revenue grew higher than it was three years ago, the latest signs of consumers’ willingness to fly.

The airline made $13.44 billion in the last three months of 2022, surpassing the $11.44 billion in sales it generated three years earlier. Higher costs eroded some of Delta’s profits, but its net income still came in at $828 million, down from $1.1 billion in the same three-month period in 2019.

Delta CEO Ed Bastian said in a press release that the company “rose to the challenges of 2022, delivering industry-leading operational reliability and financial performance.”

Here’s how Delta performed in the fourth quarter, compared to Wall Street’s expectations based on Refinitiv consensus estimates:

• Adjusted earnings per share: $1.48 vs. expected $1.33.
• Adjusted revenue: $12.29 billion, excluding refinery sales, vs. $12.23 billion expected.

Airlines were largely upbeat about the latest quarter, despite concerns about a recession and weakness from some retailers and other businesses. Thursday, American Airlines It raised revenue and profit forecasts for the period, which led to a widespread rally in the sector.

That was even after severe winter weather disrupted flights coast-to-coast over the year-end holidays, prompting mass cancellations. Southwest Airlines In particular, she struggled to recover and said her collapse could cost her more than $800 million. America Southwest reports on January 3. 26.

Delta expects to earn 15 cents to 40 cents per share on an adjusted basis in the first quarter of 2023 and increase sales 14% to 17% over the same quarter in 2019. It expects full-year 2023 earnings of $5 to $6. Period.

Delta shares fell more than 4% in pre-market trading.

This is breaking news. Check back for updates.

Southwest Airlines It cut another 2,500 flights on Wednesday, prompting more frustrated customers to look for seats on other airlines.

The Dallas-based carrier cut back 60% of its schedule and marked another day of disruption even as weather and operations improved at other airlines.

Airlines have canceled thousands of flights since last week when severe winter weather wrecked travel across the United States, but massive unrest in the Southwest has drawn scrutiny from the Biden administration and lawmakers. Southwest blamed its own internal systems for its performance.

to help stranded travelers, Delta Airlines It said Wednesday that it is “the exact prices in all markets in which Southwest operates” and that the prices are valid through Saturday. American Airlines It said it did so in “cities severely affected by the cancellation” and United said it set prices in “select cities”.

The airlines did not provide further details. The moves came after Transportation Secretary Pete Buttigieg urged other airlines to set fares.

Southwest said it will reimburse travelers for “reasonable” hotel, meal and alternative transportation expenses if customers provide receipts. Earlier this week, Southwest CEO Bob Jordan told employees that the airline would fly about a third of its multi-day schedule in an effort to reset its operations.

Southwest shares fell more than competitors for the second day in a row.

Passengers trying to find their way home are increasingly frustrated by the dearth of spare seats on other airlines during the busy holiday period.

Airlines will routinely limit last-minute fares, which are generally high and often coincide with limited seat numbers, during emergencies such as hurricanes so travelers can evacuate.

American Airlines Saturday said it will go down Mesa Aviation For some of its regional flights, citing concerns about its partner’s financial and operational problems, and issues associated with rising costs and a shortage of pilots in the industry.

Derek Kerr, US chief financial officer and head of US regional brand Eagle, said in a note to employees, which was seen by CNBC Saturday. The Americans and Mesa agree that the best way to address these concerns is to terminate our agreement.

Kerr said in his memo that the last Mesa flight for Americans will be on April 3, even though America reduced Mesa flights in March.

Now, Arizona-based Mesa plans to fly “all of our CRJ900s that fly to United Airlines“The carrier you’re really flying for,” Mesa CEO Jonathan Ornstein said in a note to employees Saturday, which was seen by CNBC.

united He declined to comment.

Large carriers such as American, United, and Delta Airlines They routinely contract with regional airlines to fly many of the shorter routes, and they account for nearly half of all departures, though this varies by airline.

The core of the problem stems from the shortage of pilots, which is more severe in regional carriers, and has become more severe since the decline in travel demand after the travel pandemic subsided. Mesa and other regional airlines have sharply raised wages to attract and retain pilots. American has raised wages in its regional subsidiaries.

Mesa’s CEO told staff that American refused to fund higher trial rates for other regional partners, adding that they were penalized for their inability to meet pre-Covid contract obligations.

“With this in mind, we are pleased to announce that we have negotiated the termination of our operations with America and are finalizing a new agreement with United that will transfer all CRJ900 aircraft currently flying American Eagle to United Express,” said Misa Ornstein. .

American did not comment on Mesa’s memo to employees.

Mesa posted a net loss of about $67 million in the nine months ended June 30, according to a securities filing. Last week, the airline postponed its quarterly earnings report.

Ace September. 30, 2021. About 45% of Mesa’s revenue came from America and 52% from United, according to the company’s latest annual filing, which was published a year ago. Misa also travels to DHL.

American said its agreement with Mesa was mostly related to its hubs at Dallas/Fort Worth International Airport and Phoenix Sky Harbor International Airport.

The United States plans to focus its flights with its wholly owned regional subsidiaries such as Envoy and PSA, as well as an independent regional airline. Sky West. Air Wisconsin will also fly for the American Eagle brand, Kerr said, kicking off their deal earlier than originally planned.

“Mesa’s previously flown flights will be filled in by these quality regional carriers in addition to our core operations, ensuring we continue to build and deliver the best global network to our customers,” Kerr wrote.