The U.S. district judge who ruled American Airlines and JetBlue must dissolve their Northeast Alliance has extended the permitted timeframe of the partnership’s dismantling, according to a Monday court filing.
The dissolution of the carriers’ alliance is now slated to happen 21 days after the court issues a final judgment and permanent injunction, rather than on June 20, 30 days after District Judge Leo Sorokin in the U.S. District Court of Massachusetts made his May 19 ruling in the case, taking into account a federal holiday.
American Airlines and JetBlue on Friday had filed a request that the court adopt their proposed effective date for the injunction, defining the effective date as the latter of 30 days following the entry of the injunction, or 30 days following the expiration of any stay of the injunction.
“Because the period proposed by the plaintiffs and the defendants are too short and too long, respectively, the injunction ultimately entered in this case will take effect twenty-one days after the court issues a final judgment and permanent injunction,” Sorokin wrote in his new order.
Additional AA, JetBlue Requests
The carriers in their Friday filing also had laid out several points against the proposed final judgement, arguments on which Sorokin did not immediately rule. The first requested that the defendants should be allowed to continue codesharing and reciprocal frequent-flyer recognition, which the carriers argued “are not allegedly unlawful aspects of the NEA,” and are “extremely common” in the airline industry.
American and JetBlue also asked the court to reject the proposed two-year ban on entering into “any new alliance, partnership, joint venture, or other agreement with another domestic air carrier if such agreement provides for revenue sharing, or for coordination of routes or capacity, in a manner substantially similar to the NEA.”
The carriers also argued that they had taken into account the possible dissolution of the alliance in its agreement and that they should be allowed to carry out those provisions as originally agreed upon. “Neither plaintiffs nor this court is in a better position to design wind-down procedures than defendants, who are intimately familiar with their customers’ needs, their own resource constraints, and their scheduling obligations,” according to the court filing. Further, American and JetBlue claim the plaintiffs never identified any aspect of the wind-down provisions that are unlawful.
In addition, American and JetBlue stated that they should not require “invasive monitoring or notice prior to entry into agreements with other domestic carriers.” The plaintiffs requested a five-year appointment of an external compliance monitor, along with supporting “agents and consultants” the monitor may deem necessary, at the “cost and expense of defendants.”
The plaintiffs also requested that the carriers be required to notify the U.S. Department of Justice prior to entering into or amending agreements, partnerships, or joint ventures with other domestic air carriers. “There is no justification for such an expansive requirement or its lengthy term (five years),” according to the carriers’ filing. “As proposed, the provision would go so far as to cover even the most mundane agreements between domestic airlines that are often critical for the operational integrity of airlines’ existing schedules.”
American and JetBlue argued that the court has recognized that the defendants made multiple amendments to the NEA in connection with the U.S. Department of Transportation’s review. “There is no reason to believe that defendants will not continue to engage in these review processes in good faith, as they have always done in the past.”
[email protected] (Donna M. Airoldi)
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