American and JetBlue not ruling out reunion, despite another court blocking former Northeast Alliance

Could American Airlines and JetBlue make another go at a partnership in the Northeast?

That may seem unlikely after a federal appeals court doubled down on a judge's 2023 ruling that scuttled a deep partnership between the two carriers. Still, there's already speculation swirling over whether the two carriers might eventually try to link up again.

First, the backstory.

The most recent development came just last week, when the 1st U.S. Circuit Court of Appeals affirmed a May 2023 district court ruling against American and JetBlue's Northeast Alliance, striking down an appeal by American. The two rulings each sided with the Biden administration's argument that the two carriers' alliance was anti-competitive.

As part of that alliance, American and JetBlue coordinated on schedules and coveted New York gate space — while also dishing out reciprocal loyalty benefits to American Airlines AAdvantage and JetBlue TrueBlue frequent flyer members.

The latest ruling against the Northeast Alliance might sound like a final nail in the proverbial coffin for American and JetBlue's ties. However, it appears there could still be some wiggle room for a looser partnership that may not attract the same scrutiny from regulators.

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In recent weeks, executives at both airlines had the chance to quell speculation over a potential future, revised alliance. They did just the opposite.

"I certainly think there could be a structure that could work, going forward," JetBlue president Marty St. George said Tuesday while speaking at an aviation industry conference in Dallas — while noting the airline would also be open to working, alternatively, with other airlines.

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JetBlue seeks new partner of some sort

JetBlue wants to link up with another carrier in some form or fashion.

Landing a new partner is one component of the airline's wide-ranging plan to return to profitability, St. George confirmed during JetBlue's third-quarter earnings call last month.

"I think we learned a lot through the NEA as far as what worked for us, what might not work for us," St. George told analysts on Oct. 29. He noted that the carrier could conceivably partner up again with American — or perhaps another carrier — albeit under a more limited arrangement than the one JetBlue and American previously employed.

Judge offered acceptable partnership framework

So, how could a future JetBlue-American partnership be possible in the wake of two court rulings?

In striking down the Northeast Alliance last year, the federal judge in Boston actually laid out a potential framework for how the two airlines could have partnered up without upsetting antitrust law. Specifically, Judge Leo T. Sorokin pointed to the setup American had on the West Coast with Alaska Airlines before Alaska joined the Oneworld alliance in 2021.

"In such an arrangement, the two carriers would not coordinate with one another on scheduling, network, or capacity decisions, and they would not share revenue on any markets where they provide competing nonstop service," Sorokin wrote in May 2023.

It's a framework not lost on JetBlue.

"I think the judge has been very clear about what he liked, and what he didn't like with respect to the law," St. George said Tuesday in Dallas. "I do think there could be a pathway that could be interesting for us."

Competitive incentives remain

It's also worth noting that many of the concerns that gave rise to the Northeast Alliance still remain.

American and JetBlue originally joined forces to better compete against the most dominant carriers in the heavily crowded New York corridor.

Delta Air Lines holds strong positions at both John F. Kennedy International Airport (JFK) and LaGuardia Airport (LGA). United Airlines is the dominant carrier at Newark Liberty International Airport (EWR).

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"I do think it was pro-consumer for JetBlue and American to get together," St. George said Tuesday. "I agreed with the thought [of] creating an additional competitor to Delta in New York — Delta's a very formidable, formidable competitor."

Airline partners are nothing new for JetBlue, which already has more than four dozen today. That includes casual interline agreements, as well as nine more robust pacts that involve frequent flyer perks; those partner carriers range from Hawaiian Airlines to Etihad Airways to Qatar Airways.

But none of those move the needle in the ultracompetitive Northeast quite like JetBlue's tie-up with American did.

When asked in March about the possibility of reuniting with American under some sort of slimmed-down agreement in the future, JetBlue CEO Joanna Geraghty told TPG, "We love working with partners. And to the extent opportunities come about, we'd be more than open to considering them."

American not ruling anything out

For its part, American says it's "still taking a look" at its options after seeing its appeal of the Northeast Alliance decision denied last week.

It's possible that evaluation could include consideration of how the regulatory environment might be affected by a new presidential administration taking office in January. The Trump administration is widely expected to take a less heavy-handed regulatory posture than the Biden administration; in addition to blocking the Northeast Alliance, the U.S. Department of Justice, under Biden, also successfully blocked JetBlue's once-planned merger with Spirit Airlines.

"We really haven't looked at it in light of a new administration yet," American CEO Robert Isom said on the sidelines of the Skift Aviation Forum in Dallas this week.

When asked whether American would be open to revisiting (and revising) its partnership with JetBlue, Isom touted the former alliance's benefits.

"The NEA was something that was unique and novel, it served customers well," Isom said. "We'll take everything the court has fed back and put that into consideration. We're not done yet trying to figure out how best to serve our customers."

Bottom line

It's entirely possible JetBlue and American decide to continue on entirely separate paths. At this point, neither airline has signaled overtly that they'd like to link up again. JetBlue has also made clear, it's open to considering partnership options with a variety of airlines — not just American.

At the same time, neither American nor JetBlue has ruled out reuniting in some capacity down the line — despite last week's appeals court ruling against the former Northeast Alliance.

For that reason, it's a storyline worth watching in the coming months.

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