The hidden side of politics

American Airlines plans to appeal ruling that blocks JetBlue partnership, CEO says

Reported by CNBC: 

An American Airlines plane takes off near a parked JetBlue plane at the Fort Lauderdale-Hollywood International Airport on July 16, 2020 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

American Airlines plans to appeal a court’s recent ruling that would block its partnership with JetBlue Airways in the Northeast, American CEO Robert Isom said Wednesday.

A spokesman for JetBlue declined to comment and didn’t say whether the airline also planned to appeal the ruling along with American.

U.S. District Judge Leo Sorokin ruled earlier this month that the airlines’ partnership in the region is anticompetitive and ordered the airlines to end the partnership in 30 days.

“We’ve got a legal system that allows for appeal, and we’re going to do that,” Isom said during a Bernstein investor conference. “I think the benefits that we proposed [in the alliance] will ultimately prevail.”

In the wake of Sorokin’s ruling, Isom said the carrier is “going to have to work with the DOJ, work with JetBlue to find out exactly what we do in the interim.”

American declined to comment further than the planned appeal. The Justice Department declined to comment.

The ruling was a win for President Joe Biden’s Justice Department, which, along with six states and the District of Columbia sued in 2021 to block the partnership, alleging it would hurt competition and consumers. The Biden administration has taken a hard line against deals it views as anticompetitive.

The trial began a year later in Boston and wrapped up late last year.

“Whatever the benefits to American and JetBlue of becoming more powerful — in the northeast generally or in their shared rivalry with Delta — such benefits arise from a naked agreement not to compete with one another,” Sorokin said in his ruling. 

The airlines argued that their partnership allows them to better compete against Delta Air Lines and United Airlines in the New York area and Boston. The partnership, approved during the last days of the Trump administration, allows JetBlue and American to coordinate on routes and schedules and share revenue.

American Airlines CFO Devon May said at the same conference on Wednesday that the company didn’t expect a material impact this year due to the ruling.

American raised its outlook for the second quarter earlier on Wednesday, due to strong demand and lower fuel costs.

Separately, the Justice Department in March filed an antitrust lawsuit to block JetBlue’s proposed acquisition of budget carrier Spirit Airlines, arguing the deal would drive up fares, especially for cost-conscious flyers.