American Airlines has filed an appeal against the decision that saw a US judge order the company to end its Northeast Alliance with JetBlue Airways.
The airline filed a brief with the 1st US Circuit Court of Appeals in Boston to ask for the ruling to be overturned as the precedent could “discourage fruitful and lawful collaboration” if left “unchecked”, despite JetBlue confirming it would be ending the partnership after the initial ruling.
American’s brief read: “In a sweeping decision, the district court found that a joint venture between American and JetBlue Airlines violated Section 1 of the Sherman Act in the absence of any showing of consumer harm and based on features inherent to joint ventures that courts have long recognized create procompetitive efficiencies.”
The Northeast Alliance saw the two airlines collaborate on a “virtual network” of codesharing, slot swaps and new routes to try and challenge the dominance of Delta and United in the US Northeast region.
The alliance was challenged in court by the country’s Department of Justice (DoJ) which had described it as a “de facto merger” of the companies’ operations in New York and Boston that risked diminishing the incentive for the airlines to compete in other markets, with Judge Leo Sorokin ultimately ruling with the DoJ.
However, American’s appeal argues that the ruling “contravenes decades of precedent” around joint ventures and ignored a lack of evidence that the alliance had been harmful to customers, saying that the decision treats “even the most welfare-enhancing collaborations as intrinsically anticompetitive.”
While JetBlue chose not to pursue an appeal, choosing instead to focus on the trial against its merger with Spirit, the injunction means that the two airlines are barred from forming any similar agreement for a decade and requires them to notify the DoJ before entering other agreements.
