American Airlines and JetBlue Airways are remaining positive about their prospects of teaming up in the Northeastern US despite a recent court ruling stating that the carrier’s planned alliance would breach competition laws.
On November 9, 2024, a federal appeal court upheld an earlier finding that their Northeast Alliance violated antitrust laws and had to be dismantled.
However, with a new administration soon to enter the White House, the airlines are hoping that a more free-market approach will be adopted by regulators.
American Airlines’ Chief Executive Robert Isom along with JetBlue’s President Marty St. George both said on November 12, 2024, that each hoped that a new partnership was still possible, despite the court ruling.
Citing the outgoing Biden administration’s reluctance to approve deals such as this in the past (along with JetBlue’s takeover of beleaguered Spirit Airlines earlier in 2024), the two men are hoping that a new Trump administration will take a more lenient approach to antitrust (anti-competition) laws allowing the alliance to go ahead after all.
According to a report by Bloomberg, the leaders from both airlines said that a new relationship between them would be possible and that a framework whereby both carriers and customers could benefit could still be found.
Isom stated that American Airlines was considering all of its options as a result of both the ruling but also in light of the result of the US Presidential election on November 5, 2024.
He added that he considered the tie-up as “pro-consumer”, saying that it would add competition in a market dominated by United Airlines and Delta Air Lines.
American Airlines and JetBlue had previously operated their Northeastern Alliance until 2021 in an arrangement that allowed customers to earn miles and have reciprocal elite benefits when flying the partner airline.
This, argued supporters of the deal, made the partnership a real competitive force in the New York area.
While the deal was first approved by the Federal government in 2020, it was opposed in 2021 and subsequently wound down.
Supporters also said that the partnership has been good for customers and allowed American and JetBlue to better compete in the New York/Boston marketplaces against Delta and United. Both American and JetBlue claim that neither carrier can grow in these markets and that both are too small to compete effectively independently.
Similarly, consumers benefitted through the increase in competition that the alliance introduced which effectively drove fares downwards.
American Airlines needs a New York-based partner because alone it cannot secure enough slots at New York airports that would allow a sustainable foothold in the marketplace. The number of slots at New York-JFK Airport (JFK) and New York-LaGuardia (LGA) is fixed.
American and JetBlue were among the smaller players, against United and Delta which hold the bulk of the slots available. However, without a significant presence in the New York arena, American Airlines is not the first-choice carrier for many travelers, it argues.
Meanwhile, in terms of JetBlue, during its third quarter 2024 earnings call on October 29, 2024, the carrier’s President Marty St. George acknowledged that one of the airline’s biggest weaknesses was its lack of partnerships.
He added that should an opportunity arise, the airline would look to partner with another major carrier to strengthen its position in the US Northeast.
“It certainly could be with American. Although if not American, then someone else,” he added.
