JetBlue Airways (B6, New York JFK) has decided not to appeal a US federal court's decision last month to outlaw its Northeast Alliance (NEA) with American Airlines (AA, Dallas/Fort Worth) and has instead begun a gradual winding down of the partnership, a process that could take several months. American, on the other hand, is to continue with the appeal.
This surprising about-turn comes after both airlines last month filed a request with the US District Court of Massachusetts in Boston to present oral arguments for a "straightforward" injunction allowing the orderly winding down of aspects of the NEA which the court deemed unlawful while trying to salvage codesharing, reciprocal frequent flyer, and bilateral prorate agreements that form part of the alliance.
While stating that it "strongly disagrees with the court's ruling against the NEA" and stands behind "the pro-competitive impact of the alliance", JetBlue, in a statement on July 5, said after much consideration, it "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, beginning a wind-down process that will take place over the coming months".
"We will continue to work through the legal process to achieve a wind-down plan that protects consumers and look forward to presenting our view to the court in the coming weeks. The Department of Justice's proposal is too onerous and overreaching, ignoring arguments the DOJ itself presented at trial about the benefits of similar aspects of other domestic carrier partnerships," JetBlue said.
Instead, JetBlue would turn even more focus on its proposed merger with Spirit Airlines (NK, Fort Lauderdale International), which it believed was "the best and most effective opportunity to truly transform the competitive landscape in the US". "As it relates to the Spirit combination, terminating the NEA renders the United States Department of Justice's (DOJ) concerns about our partnership with a legacy carrier entirely moot. With that, the DOJ should reconsider and support our plan to bring a national low-fare competitor to the Big Four; the flying public deserves better than the status quo," it stated. The DOJ opposes the proposed USD3.8 billion merger between JetBlue and Spirit and filed suit on March 7, claiming it would be uncompetitive and violate US antitrust laws. A trial date has been set for October 16, 2023, in the US District Court in Boston.
American Airlines, meanwhile, confirmed it would go ahead with its appeal against the NEA court ruling. "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 anti-competitive 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," American said.
