frequent flyer program integration<\/a>.”<\/p>\nThe ruling came as a surprise to many industry insiders who had expected the case to go the other way.<\/p>\n
\u201dThis was a bit of a surprise, as we believed with more than two years of data, the judge would rule in the airlines favor,\u201d TD Cowen analyst Helane Becker wrote, noting that she believes the decision can be appealed.<\/p>\n
<\/p>\n
What does this mean for the American Airlines and JetBlue partnership?<\/h2>\n
JetBlue said in a statement that it continued to believe that the alliance was a positive for customers.<\/p>\n
\u201dWe are disappointed in the decision. We made it clear at trial that the Northeast Alliance has been a huge win for customers,\u201d JetBlue said. \u201cThrough the NEA, JetBlue has been able to significantly grow in constrained northeast airports, bringing the airline\u2019s low fares and great service to more routes than would have been possible otherwise.\u201d<\/p>\n
The federal judge ruled that the Northeast Alliance must be “permanently enjoined” 30 days after Friday.<\/p>\n
American Airlines, in its statement, sent a strong signal that it would appeal:<\/p>\n
\u201dWe believe the decision is wrong and are considering next steps. The Court’s legal analysis is plainly incorrect and unprecedented for a joint venture like the Northeast Alliance. There was no evidence in the record of any consumer harm from the partnership, and there is no legal basis for inferring harm simply from the fact of collaboration. The Northeast Alliance has been a huge win for customers and anything but anticompetitive.\u201d<\/p>\n
JetBlue added that it was \u201cstudying the judgment in full and evaluating our next steps as part of the legal process.\u201d<\/p>\n
For now, however, the ruling seemingly implies that the tie-up will end within the next few weeks, barring an appeal.<\/p>\n
TPG will post updates as we receive them, but if you have upcoming travel booked with American and\/or JetBlue, you may want to start reconsidering your options if you were planning to take advantage of Northeast Alliance perks such as reciprocal mileage earning and redemption options, elite benefits and club access.<\/p>\n
The two carriers also expanded and reconfigured their networks to support the alliance. So, assuming that the ruling stands, many of the changes could need to be unraveled within a month.<\/p>\n
The ruling could also have implications for JetBlue\u2019s planned acquisition of Spirit Airlines, which the Department of Justice has also sued to stop. On the one hand, without the American Airlines partnership, JetBlue can argue that it is now in a weaker position and needs Spirit in order to compete effectively.<\/p>\n
On the other hand, the current decision could indicate that the Judiciary is opposed to further consolidation of the airline industry.<\/p>\n
We believe this ruling has negative implications for the JetBlue\/Spirit merger, where the Department of Justice sued to block it and where at least four state attorneys general joined the suit,\u201d Becker, the TD Cowen analyst, wrote. \u201cThe trial in that case begins in mid-October.\u201d<\/p>\n
Additional reporting Zach Griff. This is a developing story and will be updated.<\/em><\/p>\n<\/div>\n
\n
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