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American Airlines to end ticketing agreement with JetBlue

A man sleeps on a conveyer belt under an American Airlines logo at John F. Kennedy International Airport in New York January 22, 2014. REUTE
A man sleeps on a conveyer belt under an American Airlines logo at John F. Kennedy International Airport in New York January 22, 2014. REUTE

(Reuters) - American Airlines said it planned to end agreements covering ticketing, baggage handling and frequent-flyer programs with JetBlue Airways after its merger with US Airways gave it "greater connectivity" along the U.S. East Coast.

American Airlines, which merged with US Airways in December to form American Airlines Group Inc , had a so-called interline agreement with JetBlue that allowed customers to buy connecting flights on each other's planes on one ticket.

New York-based JetBlue has 80 percent of its operations in the U.S. Northeast.

"Through the merger with US Airways, American's network along the East Coast provides greater connectivity and customer benefits and there is no longer a need to supplement our combined network coverage with the JetBlue agreement," American Airlines' spokesman Casey Norton wrote in an email to Reuters.

Carriers enter into interline agreements because they allow them to offer more destinations without having to make large investments.

The partnership with American Airlines was "not overly material when we think about the other partnerships that we have," JetBlue Chief Executive Dave Barger said at a JP Morgan conference in New York City on Monday.

JetBlue, which has similar agreements with 30 other carriers, also said it expected unit revenue, a measure of passenger revenue per available seat mile, to rise 1-2 percent in the current quarter.

American Airlines and JetBlue will not accept new interline ticket sales with each other from Monday, the companies said in a statement.

The carriers also said customers using their reciprocal frequent-flyer programs would no longer earn miles or points when traveling on eligible routes, effective April 1.

The frequent-flyer program agreement between the two includes select routes from Boston Logan International Airport and New York's John F. Kennedy International Airport.

All American Airlines' "AAdvantage" miles or JetBlue's "TrueBlue" points already accrued through this partnership will be credited to customers' accounts and will not be affected, the carriers said.

American Airlines Group also said its February load factor, or percentage of seats sold, fell to 78.4 percent from 78.7 percent a year earlier.

American Airlines shares were down about 1 percent at $38.55 in early trading. JetBlue's shares were down 0.55 percent.

(Reporting by Sagarika Jaisinghani in Bangalore and Karen Jacobs in Atlanta; Editing by Savio D'Souza and Saumyadeb Chakrabarty)

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