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American Airlines would consider new JetBlue venture if it wins appeal

Published 06/03/2024, 03:34 PM
Updated 06/03/2024, 03:36 PM
© Reuters. FILE PHOTO: An American Airlines plane sits at a gate at Logan Airport ahead of the July 4th holiday in Boston, Massachusetts, U.S., June 28, 2023. REUTERS/Brian Snyder/File Photo

By David Shepardson

WASHINGTON (Reuters) - American Airlines (NASDAQ:AAL) told an appeals court Monday would consider a new arrangement with JetBlue Airways (NASDAQ:JBLU) if it wins a ruling reversing a May 2023 decision requiring it to end an alliance.

U.S. District Judge Leo Sorokin ruled in the airlines' "Northeast Alliance" (NEA) that allowed the two carriers to coordinate flights and pool revenue violated antitrust law. Sorokin said American and JetBlue cannot enter into any agreement that provides for revenue sharing, or for coordination of routes or capacity similar to the Northeast Alliance before entering various other agreements over the next decade.

American Airlines lawyer Greg Garre told the Boston-based 1st U.S. Circuit Court of Appeals the ruling prevents the airline "from entering into any similar arrangement and that gives the district court continuing jurisdiction over this case for at least 10 years."

Asked by the court if American wants "other things with JetBlue," Garre said: "That's correct. We would seriously consider that, yes, and the injunction prevents us from doing that -- any sort of similar arrangement."

Justice Department lawyer Daniel Haar said American and JetBlue were fierce competitors on price before the agreement. "It was eliminated under the NEA," Haar said. "Before the NEA was established this competition was directly benefiting consumers."

Through their partnership, American, the nation's largest airline, and JetBlue, the sixth largest, joined forces for flights in and out of New York City and Boston, coordinating schedules and pooling revenue.

JetBlue opted not to appeal as it unsuccessful sought to bolter its efforts to win approval for its now dropped $3.8 billion purchase of Spirit Airlines (NYSE:SAVE). JetBlue did not immediately comment Monday.

© Reuters. FILE PHOTO: An American Airlines plane sits at a gate at Logan Airport ahead of the July 4th holiday in Boston, Massachusetts, U.S., June 28, 2023. REUTERS/Brian Snyder/File Photo

American Airlines said in legal briefs Sorokin's ruling invalidating their partnership must be overturned because it threatens a wide range of other collaborations between competitors.

"If left unchecked, the district court’s decision will discourage fruitful and lawful collaboration that benefits consumers through increased output, decreased prices, and improved product quality," American Airlines' lawyers wrote.

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