American Airlines intends to appeal the recent ruling ordering it and JetBlue Airways to cease their Northeast Alliance (NEA).
“Look, we’ve got a legal system that allows for appeal, and we’re going to do that,” CEO Robert Isom said May 31 at the Bernstein Strategic Decisions Conference. “As we look forward, I think the benefits that we’ve proposed will ultimately prevail. But in the meantime, we’re going to have to work with the DOJ, work with JetBlue to find out exactly what we do in the interim, and we’re going to do that. It’s just a lot of work going on right now.”
A U.S. federal judge on May 19 ordered the carriers to permanently cease their agreement in 30 days, in a ruling that found the more than two-year-old alliance to be anticompetitive. JetBlue and American have maintained that their alliance is pro-consumer, creating more competition in the U.S. northeast region. The federal ruling stemmed from a U.S. Justice Department (DOJ) suit to block the arrangement.
By April, combined daily departures covered under the NEA reached roughly 290 from New York JFK, 190 from LaGuardia, and 220 from Boston.
In remarks at the investor conference, American continued to downplay financial impacts should the NEA cease, and reiterated consumer benefits it said were created through the partnership.
“In terms of impact, the New York region for non-hub flying is less than 5% of our total flying,” Isom added. “It’s something that we’re really focused on, but at the end of the day it won’t have material short-term impacts.”
He added, “I couldn’t be more pleased with the network we have. Of course, I think that there’s a lot more that we could be doing, especially if we can prevail with the NEA.” On next steps for the airline partnership should an appeal fail, Isom noted, “There’s a lot to be worked out.”
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