DALLAS — Late Friday, American Airlines (AA) and JetBlue Airways (B6) asked a US judge to allow them to continue with mutual frequent flyer recognition and codeshare arrangements, which enable multiple airlines to sell seats on the same flight.
The news, first reported by Reuters, makes good on AA CEO Robert Isom’s statement last week that the airline would move forward with an appeal to the May 19 decision, as both carriers look at how they can rejig their alliance while working with the Department of Justice (DOJ) to reach a suitable conclusion that will benefit all parties.
The Airlines, the Judge, and the DOJ
On May 19, U.S. District Judge Leo T. Sorokin ruled that the airlines’ Northeast Alliance (NEA) used by AA and B6 to coordinate flights and pool revenue must be terminated, citing that the arrangement meant higher prices for consumers and ordering the companies to part ways within 30 days.
Sorokin’s decision stated that “The NEA, operating as it was designed and intended by American and JetBlue, substantially diminishes competition in the domestic market for air travel. It does so by combining the Boston and New York operations of two airlines that are among the most significant competitors in that region.”
The airlines argued that Sorokin should allow them to continue codesharing and reciprocal frequent flyer programs because they are legal and “to ensure that the right airline is paid for the service provided to the consumer.”
The Justice Department claimed that the alliance gave the airlines more than 80% of the market share in flights from Boston to Washington and six other airports, including JFK, LaGuardia, and Newark in the New York area.
According to Reuters, the DOJ said Sorokin should reject the airline’s “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 department went further, stating that the airlines had to “return to being fully independent competitors to remedy their unlawful distortion of airline competition in the Northeast and beyond.”
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Featured image: N838AW American Airlines Airbus A319 (America West Heritage Livery). Photo: Tony Bordelais/Airways