American Airlines’ plan to appeal the court order to wind down its Northeast Alliance with JetBlue might be moot. That’s because JetBlue has already decided to move on.
“If JetBlue abandoned the deal, there is nothing left to appeal,” said Eleanor Fox, professor emeritus at the New York University School of Law. “The appeal would be dismissed as moot.”
JetBlue said Wednesday that it won’t appeal the order to break up its partnership with American in New York and Boston. JetBlue will initiate the termination of the alliance and focus attention on securing legal approval to acquire Spirit Airlines.
Per the terms of JetBlue’s Northeast Alliance agreement with American, either carrier may terminate the partnership at its sole discretion should government action prevent the alliance from being fully implemented.
Such a determination can be made if the airline concludes that the partnership can’t be modified to make it feasible.
Based upon that provision, JetBlue appears to be on solid ground in terminating the alliance, according to Christine Bartholomew, a professor of law and an antitrust expert at the University at Buffalo, and James Speta, a professor and antitrust specialist at Northwestern University’s Pritzker School of Law.
Speta said American would have to convince the First Circuit Court of Appeals in Boston that there is still a live controversy in the case.
American, he said, could potentially argue that JetBlue might recommit to the alliance if an appeal is won. Or it could argue that the opinion passed down in May by Judge Leo Sorokin of the U.S. District Court in Massachusetts would be precedent-setting, thereby making an appeal relevant.
However, said Speta, both arguments would be difficult to make. He explained that only decisions by appellate courts and the Supreme Court are regarded in the U.S. legal system as precedent-setting. District judges don’t have to consider the rulings of other district courts.
Still, the antitrust experts said American would likely want Sorokin’s decision reversed due to the impact it could have on future court deliberations about alliances.
“Courts often treat other opinions as persuasive if they’re not precedent, and that’s why American doesn’t want it hanging around,” Speta said.
Bartholomew said that American, which has leaned heavily into domestic alliances with JetBlue and Alaska, “has every reason to challenge the ruling,” since it could hinder pursuing similar alliances in the future.
Under the Northeast Alliance, American and JetBlue jointly schedule flights and split revenue on most of their operations out of Boston Logan, Newark, LaGuardia and JFK airports. Sorokin ruled that such measures are anticompetitive.
The alliance also includes codesharing and reciprocal loyalty program benefits. JetBlue and American have asked the court to allow these to continue. The Justice Department opposes that request and wants the entire alliance terminated, though with an adequate wind-down period for the airlines to honor existing bookings.
Those matters are scheduled to be debated in a final judgement hearing on July 26.
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