JetBlue Ignores Approach from American Airlines
Bankrupt American Airlines is attempting to reach a flight sharing deal with fellow airline JetBlue Airways (NASDAQ: JBLU), but its pleas are falling on deaf ears.
According to the New York Post, the lack of interest from JetBlue is putting pressure on American to go the merger route instead.
American had been working hard towards a code-sharing deal that would see the two airlines unite on domestic flights based out of New York's JFK Airport. However, a source sold the New York Post that, "JetBlue does not want to be a pawn."
American parent company AMR Corporation filed for bankruptcy protection back in November 2011, citing high fuel prices, a need to cut labor costs and slowing consumer travel demand among other reasons.
Benzinga columnist Daniel Ho provided color on the announcement, stating that, "while AMR's stock may become worthless - no one, at least not yet, is betting that American Airlines will disappear as a company. We were also assured by the company that all the frequent flyer mileages will continue to be honored. The main goal of the bankruptcy was to help the airline cut labor cost and to reduce its debt burden."
American is reportedly eyeing US Airways (NYSE: LCC), Alaska Air (NYSE: ALK), Virgin America, and Republic Airways Holdings' (NASDAQ: RJET) Frontier Airlines - as well as JetBlue - as potential merger candidates.
Shares of JetBlue were trading at $5.72 at the time of posting, up almost 2 percent from Tuesday's market close and up 10 percent year to date.
Follow me @BCallwood.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.