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American Airlines and JetBlue Airways launched the Northeast Alliance in 2021. This strategic partnership allowed for codeshares, frequent flyer reciprocity, and closer alignment between the two carriers. American has long struggled to build its presence in NYC organically and JetBlue would feed it traffic so that that New York would serve as an international gateway. For the past two years, this alliance has worked as described.
In September 2021, the Department of Justice (DOJ) filed a lawsuit challenging this alliance. The trial began in Boston in 2022 with the DOJ arguing that this was anti-competitive. The case played out in court until December 2022 and in May a federal judge permanently ended the partnership and dissolved the alliance effective 30 days from that day. This was a huge blow for both airlines and appeals were filed.
American and JetBlue requested that they be able to still offer codeshares and reciprocal frequent flyer benefits, but the DOJ wasn’t having it. They wanted the relationship completely severed, but agreed that existing tickets could be honored.
Today, JetBlue announced that it was dropping its appeal. The carrier disagrees with the court’s ruling, but it is winding down the American partnership and will focus its energy on its acquisition of Spirit Airlines. This seems to be a calculated move as it should help JetBlue get one step closer to its merger with Spirit. Essentially, it renders the DOJ’s concerns about JetBlue’s partnership with a legacy airline “entirely moot.”
American also released a statement, but its opinion is a bit more confusing. It reads:
JetBlue has advised us that it will not join the appeal of the District Court ruling in the Northeast Alliance case. 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 and that an erroneous judicial decision disregarding the NEA’s consumer benefits has led to an anticompetitive outcome. American will therefore move forward with an appeal. JetBlue has been a great partner, and we will continue to work with them to ensure our mutual customers can travel seamlessly without disruption to their travel plans.”
It seems as if American wants to keep the Northeast Alliance regardless of whether JetBlue wants to be involved. It still needs to be determined if the two airlines can have any sort of connection and what benefits will be offered to travelers. JetBlue wants its merger with Spirit to be completed and it will need to cast aside American in order for that to happen.
Anthony’s Take: It looks like the Northeast Alliance is dead. If it is, American will likely retreat further in its international offerings out of NYC. This might be enough (along with other concessions already agreed upon) for the JetBlue/Spirit deal to happen.
(H/T: One Mile at a Time.)
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