American Airlines and JetBlue Airways announced on July 21, 2023, they would begin to disassemble their Northeast Alliance, a collaborative arrangement that had been operational for three years. The decision comes following a U.S. judge’s ruling in May that ordered the alliance to be terminated.
The Northeast Alliance enabled the two airlines to synchronize their flights and share revenue. However, from July 21, customers of American Airlines and JetBlue won’t be able to make fresh codeshare reservations with the other carrier. JetBlue confirmed last week that it plans to dissolve the alliance.
Court Ruling and Airline Reactions
The court order to end the alliance resulted from a decision by U.S. District Judge Leo Sorokin, who found the partnership to have significantly lessened competition in the domestic airline scene. JetBlue has decided not to contest the ruling, but American Airlines has signaled its intention to challenge the verdict.
American Airlines, being the largest U.S. airline by fleet size, with JetBlue ranking sixth, views the breakup of the alliance as a significant blow to its revenue growth strategy. This strategy involved leveraging alliance partners to cater to passengers in non-competitive markets.
Implications of the Alliance Dissolution
The Northeast Alliance had been instrumental in American Airlines’ strategy in the New York market, a region where the airline had been struggling financially. The alliance facilitated American Airlines’ shift away from unprofitable routes while sustaining its New York presence and driving traffic towards its global partners.
JetBlue contends that its severance from American Airlines renders the U.S. Justice Department’s objections against its merger deal with Spirit Airlines as “completely irrelevant.” This proposed merger, if it materializes, would mark the largest shakeup in the U.S. airline industry since the 2013 union of American and US Airways. A court hearing regarding the Justice Department’s lawsuit to block the deal is scheduled for October.
Minimizing Disruption to Customers
Both airlines stated that they are striving to “minimize disruption to customers.” For travelers with existing bookings, they’ll need to ensure their frequent flyer numbers are added to their bookings before July 21. Customers can also collect frequent flyer credit for all tickets purchased prior to July 21, provided their account numbers are added before that date.
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