By David Shepardson
WASHINGTON (Reuters) -U.S. District Judge Leo Sorokin on Monday delayed the effective date of a permanent injunction after ruling American Airlines (NASDAQ:AAL) and JetBlue Airways (NASDAQ:JBLU) must end their Northeast Alliance (NEA) they used to coordinate flights and pool revenue.
Sorokin initially said the injunction would take effect June 20. He said Monday he would now make the effective date 21 days after he issues a final judgment. On Friday, the airlines asked Sorokin to allow them to continue mutual frequent flyer recognition and codeshare arrangements.
"Customers who have not yet purchased their tickets will lose access to scores of nonstop flight options and the ability to mix-and-match American and JetBlue flights to create hundreds of convenient one-stop connections," the airlines said Friday.
American and JetBlue each rose around 3% Monday.
The Justice Department said Sorokin should reject the airlines' "invitation to craft a new 'NEA Lite' on the fly." The court should not "bless a different partnership, in a matter of days, simply because it lacks some of the most brazen features of the NEA."
The Justice Department and six states sued in 2021 to unwind the NEA announced in 2020, calling it a "de facto merger" of the American and JetBlue Boston and New York operations that removes incentives for them to compete.
The airlines oppose other proposed U.S. disclosure and monitoring conditions, calling them onerous and unnecessary, and oppose a two-year ban on any new alliance with any another U.S. air carrier similar to the NEA.
American is the largest U.S. airline by fleet size and low-cost carrier. JetBlue is the sixth largest.
American has said it plans to appeal. JetBlue has not announced a decision.
The Justice Department argued the alliance gave the airlines more than 80% of market share in flights from Boston to Washington and six other airports including the New York area's JFK, LaGuardia and Newark.
Separately, the Justice Department filed suit in March aimed at stopping JetBlue from buying discount rival Spirit Airlines (NYSE:SAVE).