By David Shepardson
WASHINGTON (Reuters) – American Airlines (NASDAQ:) told an appeals court on Monday that it would consider a new settlement with JetBlue Airways (NASDAQ:) if it wins a ruling reversing a May 2023 decision that required it to form an alliance to end.
U.S. District Judge Leo Sorokin ruled in the airlines’ Northeast Alliance (NEA) case that the two airlines were allowed to coordinate flights and pool revenue in violation of antitrust law. Sorokin said American and JetBlue cannot enter into any agreement that provides for revenue sharing, or coordination of routes or capacity similar to the Northeast Alliance, before entering into several other agreements over the next decade.
American Airlines attorney Greg Garre told the Boston-based 1st U.S. Circuit Court of Appeals that the ruling prevents the airline from “entering into a similar settlement and allows the district court to retain jurisdiction over this matter for at least 10 years.”
When asked by the court whether the American wants ‘other things with JetBlue’, Garre said: ‘That’s right. We would seriously consider that, yes, and the order prohibits us from doing that – any kind of similar arrangement.”
Justice Department attorney Daniel Haar said American and JetBlue were fierce competitors on price before the deal. “It was eliminated under the NEA,” Haar said. “Before the NEA was created, this competition directly benefited consumers.”
Through their partnership, American, the nation’s largest airline, and JetBlue, the sixth largest, joined forces on flights to and from New York City and Boston, coordinating flight schedules and pooling revenue.
JetBlue opted not to appeal as it tried unsuccessfully to strengthen its efforts to win approval for its now scrapped $3.8 billion purchase Spirit Airlines (NYSE:). JetBlue did not immediately comment Monday.
American Airlines said in legal filings that Sorokin’s ruling, which invalidates their partnership, should be overturned because it threatens a wide range of other collaborations between competitors.
“If left unchecked, the court’s decision will discourage a fruitful and lawful partnership that benefits consumers through increased production, lower prices and better product quality,” American Airlines’ lawyers wrote.
