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American Airlines Seeks New Arrangement with JetBlue Pending Court Ruling Reversal

By  |  June 3, 2024
JetBlue

American Airlines has expressed willingness to consider a new arrangement with JetBlue Airways, contingent upon a favorable ruling from an appeals court. This comes after a May 2023 decision by U.S. District Judge Leo Sorokin mandated the dissolution of the airlines’ “Northeast Alliance” (NEA), which had permitted the two carriers to coordinate flights and share revenue.

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    Judge Sorokin’s ruling determined that the NEA violated antitrust laws, preventing American and JetBlue from engaging in any agreement involving revenue sharing or coordination of routes and capacity for the next decade. American Airlines’ lawyer, Greg Garre, emphasized the restrictive nature of the ruling, noting that it prohibits the airline from forming any similar arrangements and grants the district court ongoing jurisdiction over the matter for at least ten years.

    During Monday’s hearing at the Boston-based 1st U.S. Circuit Court of Appeals, Garre confirmed that American Airlines is interested in exploring further collaboration with JetBlue. “We would seriously consider that, yes, and the injunction prevents us from doing that — any sort of similar arrangement,” Garre responded when asked by the court.

    Read more: DOJ Expected To File Antitrust Suit Against JetBlue-Spirit Merger: Bloomberg

    The Justice Department, represented by lawyer Daniel Haar, argued that the NEA had eliminated price competition between American and JetBlue, which had previously benefited consumers. Haar stated, “Before the NEA was established this competition was directly benefiting consumers.”

    The NEA, which involved cooperation on flights in and out of New York City and Boston, was initially intended to enhance scheduling efficiency and revenue sharing between American, the nation’s largest airline, and JetBlue, the sixth largest.

    JetBlue has opted not to appeal the ruling, focusing instead on its efforts to gain approval for its now-abandoned $3.8 billion acquisition of Spirit Airlines. The airline did not provide immediate comment on Monday.

    In its legal briefs, American Airlines argued that Judge Sorokin’s decision invalidating the NEA could have broader implications, potentially threatening other beneficial collaborations between competitors. The airline’s lawyers contended that the ruling could discourage “fruitful and lawful collaboration that benefits consumers through increased output, decreased prices, and improved product quality.”

    Source: Kdal610