© Reuters. FILE PHOTO: An American Airlines Airbus A321-200 takes off from Los Angeles International Airport (LAX) in Los Angeles, California on March 28, 2018. (Reuters)/Mike Blake
By David Shepardson
WASHINGTON (Reuters) – American Airlines (NASDAQ:) and JetBlue Airways (NASDAQ::) asked a U.S. judge late on Friday to allow them to continue their mutual frequent flyer identification and codeshare arrangements.
US District Judge Leo Sorokin ruled May 19 that the airlines must terminate their Northeast Alliance (NEA) which they used to coordinate flights and pool revenue.
The airlines said Sorokin should allow them to continue codeshare and mutual frequent flyer programs, arguing that such agreements are legal and to “ensure that the appropriate airline pays for the service provided to the consumer.” Codeshare allows several airlines to sell seats for the same flight.
The Justice Department said Sorokin should reject calls on airlines to quickly formulate a new “NEA Lite.” The court should not “blessing a different partnership, on a matter of days, simply because it lacks some of the more brazen traits of the NEA”.
The Justice Department and six states sued in 2021 to retract the NEA announcement announced in 2020, calling it a “de facto merger” between US operations and JetBlue’s Boston and New York that removes incentives for them to compete.
On Friday, the administration said airlines “should abandon…
entanglements and return to being fully independent competitors to address their illegal distortion of airline competition in the Northeast and beyond.”
Other airlines have opposed the proposed US disclosure and monitoring requirements as onerous and unnecessary and oppose a two-year ban on any new NEA-style alliance with any other US airline.
The airlines said Sorokin should minimize consumer disruption and not become “the central planner in the break-up of a multi-year integrated joint venture in violation of basic principles of antitrust law.”
American is the largest US airline by fleet size and the low-cost carrier. JetBlue is the sixth largest.
American said last week it plans to appeal. JetBlue has not made any decision.
The Justice Department argued that the alliance gave airlines more than 80% market share in flights from Boston to Washington and six other airports including New York’s JFK, LaGuardia and Newark.
Separately, the Justice Department filed a lawsuit in March aimed at blocking JetBlue from buying a discount competitor Spirit Airlines (NYSE:).
