American Airlines Group has asked a federal appeals court to overturn a decision invalidating its Northeast Alliance (NEA) with JetBlue Airways (B6, New York JFK), arguing the current ruling could prevent the company from entering into future joint ventures.
According to Gregory Garre, a lawyer for American Airlines (AA, Dallas/Fort Worth), the decision to invalidate the alliance was based on legal errors as well as a lack of understanding of how antitrust laws operate in the United States. The ruling also imposed a ten-year ban on any similar alliance.
If the decision is not overturned, “that would leave in place an injunction that prevents us from entering into any similar arrangements under a legally erroneous antitrust framework,” Garre explained to a three-judge panel on the First Circuit Court of Appeals in Boston, adding that this would also impact the broader airline industry in the country.
The final judgement, issued last year by District Judge Leo Sorokin, imposed a ten-year ban on both carriers, preventing them from entering any new alliance, partnership, joint venture, or other agreement resulting in revenue sharing or coordination of routes or capacity, similar to the NEA. After the ruling, JetBlue ceased its fight for the NEA as it looked to protect its ill-fated merger with Spirit Airlines (NK, Fort Lauderdale International).
But “we do want to go forward with similar arrangements,” Garre said about American Airlines' plans, adding that the company does not believe this case is moot but rather a live dispute that could have a lasting impact on the carrier.
Daniel Haar, a lawyer for the United States Department of Justice, had argued that competition that directly benefited consumers was wiped out through the Northeast Alliance. “Decisions on who flies on which routes were decided under a committee of American and JetBlue executives, not by the free market anymore. That makes the market unresponsive to consumer preference,” he said.
Additionally, the DOJ argued that Judge Sorokin’s ruling in 2023 did not broadly condemn all joint ventures and that, in fact, a separate agreement would be evaluated on its own terms, as with American Airlines and Alaska Airlines’s West Coast International Alliance. Moreover, neither carrier is prohibited from entering into new agreements, including with each other, that are not otherwise prohibited by antitrust laws or other laws and regulations.
