A federal court’s order last week that American and JetBlue wind down their Northeast Alliance (NEA) in New York and Boston within 30 days won’t impact travelers this summer, American CFO Devon May said Thursday.
“NEA is not going to change our capacity in New York in the short-term. If there are adjustments, they’ll be longer term,” May said during an appearance at the Wolfe Research Global Transportation and Industrials Conference. “It’s not going to impact customers this summer. So, any customers that are booked through the NEA will be taken care of.”
On May 19, Judge Leo Sorokin of the U.S. District Court in Massachusetts sided with the Department of Justice, the District of Columbia and six states that sued to block the NEA as anticompetitive. Under the alliance, American and JetBlue coordinate schedules and split revenue on the large majority of their operations out of Boston Logan, Newark, LaGuardia and JFK airports.
Sorokin ruled that the partnership runs afoul of antitrust regulations because it has effectively ended competition between JetBlue and American in those capacity-constrained markets and has reduced the likelihood that they would compete vigorously even outside of the Northeast.
On Thursday, May reiterated that American disagrees with the ruling. But he didn’t say whether the airline would appeal.
“You’ll hear more from American in the coming days and probably the coming weeks as to what our next steps are,” he said.
He said that an end to the NEA would impact American in New York. But May downplayed the effect that dissolving the alliance would have on the company’s bottom line. New York flying, he said, accounts for approximately 5% of American’s capacity, excluding flying the carrier does between the New York area and other hubs.
In his ruling, Sorokin suggested that an alliance like American has with Alaska on the West Coast would be a legal alternative to the NEA. American and Alaska codeshare and partner on loyalty benefits. But the partnership features much more limited revenue sharing. And the carriers don’t jointly plan their schedules.
“There’s some value in an Alaska-style agreement,” May said. “We like the NEA and how it’s structured. We believe it is delivering for our customers.”