While JetBlue Airways says it will not appeal the May 19 ruling ordering it to cease its Northeast Alliance (NEA) with American Airlines—a move JetBlue says should strengthen its argument for a merger with Spirit Airlines—American still plans an appeal.
“Despite our deep conviction in the procompetitive benefits of the NEA, after much consideration, JetBlue has made the difficult decision not to appeal the court’s determination that the NEA cannot continue as currently crafted, and has instead initiated the termination of the NEA,” JetBlue said in a July 5 statement, noting that it is “beginning a wind down process that will take place over the coming months.”
“We will now turn even more focus to our proposed combination with Spirit,” JetBlue said. “Terminating the NEA renders the U.S. Department of Justice’s (DOJ) concerns about our partnership with a legacy carrier entirely moot.”
The federal ruling that found the alliance to be anticompetitive stemmed from a DOJ suit to block the arrangement. JetBlue’s second federal antitrust challenge, a DOJ suit seeking to block its planned merger with Spirit, goes to court in October.
Calling the May ruling an “erroneous judicial decision disregarding the NEA’s consumer benefits,” American in a July 5 statement said it would still push back and would continue to work with JetBlue in assisting mutual customers. JetBlue in turn pointed to the complexity of the partnership and said customers “can feel confident in new and existing bookings for the coming months.”
“JetBlue has advised us that it will not join the appeal of the District Court ruling in the Northeast Alliance case,” said American on July 5. “We, of course, respect JetBlue’s decision to focus on its other antitrust and regulatory challenges. At the same time, JetBlue’s decision and reasoning confirm our belief that the NEA has been highly pro-competitive ... American will therefore move forward with an appeal.”
In his ruling, U.S. Judge Leo Sorokin ordered the carriers to cease their more than two-year-old partnership in one month’s time, asking the Plaintiff and Defendant for proposed final judgment (PFJ) terms, which were filed on June 9 and resulted in an extension of the injunction date. PFJ arguments from American and JetBlue centered around keeping the “pro-competitive” codesharing and frequent flyer portions of the arrangement intact. The carriers also refuted “highly invasive monitoring and unprecedented notice requirements” proposed by the DOJ which the Defendants said amounted to “unprecedented overreach.” The DOJ’s PFJ filing gave no ground, stating that the airlines should “abandon their entanglements and return to being fully independent competitors.”
American and JetBlue are scheduled to appear in court on July 26—a date that was rescheduled from July 14 in a July 5 court filing—with JetBlue still pushing back against DOJ’s “onerous and overreaching” PFJ terms in its most recent statement. JetBlue also noted its wind-down plan would be achieved through a legal process and that it “look[ed] forward to presenting our view to the court in the coming weeks.”
An injunction is planned to take place 21 days after the court issues a final judgement. American and JetBlue had previously been ordered to cease the arrangement by June 20.
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