What happened

Since the start of the pandemic, airline stocks have tended to move together, going up and down more due to macro issues like travel demand and the price of oil instead of company-specific news. But American Airlines Group (AAL -1.60%) is an outlier today, down as much as 5% even as rivals Delta Air Lines and United Airlines Holdings are basically flat.

The reason is likely the potential blowback from a transaction that does not directly involve American Airlines, but could leave the its competitive position in the U.S. Eastern Seaboard challenged in the years to come.

So what

American has been a laggard among airline stocks in recent years. The company was the last of the so-called "Big Three" with Delta and United to go through bankruptcy last decade, and the last to find a merger partner. It came into the pandemic relatively weak compared to those rivals, and it's still trying to sort out its competitive position in an industry that has rapidly consolidated.

JetBlue Airways' (JBLU 0.59%) planned acquisition of Spirit Airlines could present a new challenge to American's positioning. Regulators appear certain to take a hard look at JetBlue's merger plans, and they could require significant conditions in order for the deal to win antitrust approval.

That's where American Airlines comes in. In 2021, American and JetBlue announced a partnership to coordinate schedules in crowded Northeast markets in the U.S., with each airline filling gaps in the other's schedule and JetBlue feeding American international flights via its domestic service.

The partnership has helped to boost American's presence in important corporate markets where the airline trailed Delta and United. Earlier this year, American Airlines President Robert Isom said alliances "allow us to create an industry-leading presence in markets that have historically been difficult for American."

The Department of Justice is skeptical, late last year filing suit to block the partnership that it claims "harms air travelers nationwide."

Add it all up, and it is easy to see how the DOJ might make JetBlue ending its American Airlines relationship a key part of any settlement that allows the airline to acquire Spirit.

Now what

The threat is real, but investors should not get too far ahead of themselves. JetBlue, for what it is worth, has signaled a willingness to make some concessions in order to buy Spirit but so far it says an end to the alliance is off the table. The alliance is arguably as important to JetBlue's industry position as the Spirit deal would be, and JetBlue is unlikely to abandon it without a fight.

Second, even if the partnership were to fall, there is no guarantee the Spirit deal will be approved, and it is quite possible the status quo will continue indefinitely. At the very least, American has a lot of time to think up and implement a plan B while the JetBlue partnership remains in place.

American has a lot of issues, and for investors looking to buy into an airline, Delta or Southwest Airlines look like better choices for the foreseeable future. JetBlue's move creates yet another potential obstacle that American will have to overcome, but it does not meaningfully change the outlook for the stock.