American, JetBlue urge US judge to allow them to keep codeshare arrangements

By David Shepardson

WASHINGTON (Reuters) – American Airlines (NASDAQ:) and JetBlue Airways (NASDAQ:) asked a U.S. judge late Friday to allow them to continue mutual frequent flyer recognition and codeshare arrangements.

U.S. District Judge Leo Sorokin ruled on May 19 that the airlines must end their Northeast Alliance (NEA) they used to coordinate flights and pool revenue finding the arrangement means higher prices for consumers and ordering the companies to part ways within 30 days.

The airlines said Sorokin should allow them to continue codesharing and reciprocal frequent flyer programs, arguing such agreements are lawful and “to ensure that the right airline is paid for the service provided to the consumer.” Codeshares allow multiple airlines to sell seats for the same flight.

The Justice Department said Sorokin should reject the airlines “invitation to craft a new ‘NEA Lite’ on the fly.” The court should not “bless a different partnership, in a matter of days, simply because it lacks some of the most brazen features of the NEA.”

The Justice Department and six states sued in 2021 to unwind the NEA announced in 2020, calling it a “de facto merger” of the American and JetBlue Boston and New York operations that removes incentives for them to compete.

The department said Friday the airlines “must abandon their

entanglements and return to being fully independent competitors to remedy their unlawful distortion of airline competition in the Northeast and beyond.”

The airlines opposed other proposed U.S. disclosure and monitoring conditions calling them onerous and unnecessary and oppose a two-year ban on any new alliance with any another U.S. air carrier similar to the NEA.

The airlines said Sorokin should minimize consumer disruption and not become “the central planner in the unwinding of a multi-year integrated joint venture in violation of cardinal principles of antitrust law.”

American is the largest U.S. airline by fleet size and low-cost carrier. JetBlue is the sixth largest.

American said last week it plans to appeal. JetBlue has not made a decision.

The Justice Department argued the alliance gave the airlines more than 80% of market share in flights from Boston to Washington and six other airports including the New York area’s JFK, LaGuardia and Newark.

Separately, the Justice Department filed suit in March aimed at stopping JetBlue from buying discount rival Spirit Airlines (NYSE:).