Judge Blocks JetBlue-American Airlines Partnership

Travelers who take advantage of American Airlines and JetBlue Airways’ partnership through the Northeast Alliance may face big changes in the coming weeks.

A federal judge has ordered the airlines to disband their agreement within 30 days.

Barring further legal maneuvering, the order could mean the end of the Northeast Alliance, which enables codesharing on certain flights, as well as the ability for members of both airlines’ loyalty programs to receive reciprocal perks on the carriers.

The decision came after a lawsuit filed by the U.S. Department of Justice. It argued the partnership between American and JetBlue stymies competition, ultimately hurting consumers. The airlines and the government faced off in a monthlong trial last fall.

So far, in the wake of the judge’s ruling, neither airline has shared specifics about how the decision might directly affect customers.

Those with existing reservations booked via the partnership or those planning travel in the near future don’t need to worry just yet. The airlines can still appeal the decision, but if JetBlue and American are ultimately forced to undo their partnership, options may be limited for many flyers.

Launched in 2021, the Northeast Alliance between American Airlines and JetBlue features two main elements at its core: a codeshare agreement and reciprocal benefits.

First, American and JetBlue codeshare on certain flights in and out of four key Northeast airports:

• Boston Logan International Airport.

• New York-John F. Kennedy International Airport.

• New York-LaGuardia Airport.

• Newark Liberty International Airport.

The idea is, you can book a ticket on American and end up with one or all of the flights on your trip aboard a JetBlue aircraft or vice versa … all on one seamless itinerary.

As recently as December 2022, the airlines announced 10 new destinations as part of the partnership. The agreement provides customers with “more choice and service.”

The airlines have even altered where they operate at certain Northeast airports, accordingly, since launching the partnership a few years ago.

Last summer, for instance, JetBlue finished relocating all of its LaGuardia Airport gates to Terminal B, where American operates its hub, making it easy for customers to make connections.

The second big part of the Northeast Alliance is the reciprocal benefits offered to American and JetBlue’s loyalty members, which transfer between the airlines.

The agreement allows TrueBlue members to earn points and Mosaic elite status tiles while flying on American flights. And AAdvantage members can earn miles while flying on JetBlue flights (though not on JetBlue’s transatlantic flights).

Through the alliance, AAdvantage elite status members and Mosaic elite status members can also enjoy some of their loyalty perks while flying aboard the opposite carrier, from free bags to complimentary economy plus seats and priority boarding.

As part of the judge’s order, all of this would presumably have to end 30 days after the May 19 ruling — which would fall in mid-June.

Despite the order to end the Northeast Alliance, neither airline seems to be in a hurry to make swift changes.

A quick check of American’s website for a hypothetical Fourth of July trip from Raleigh-Durham International Airport in North Carolina to Boston reveals an itinerary entirely operated by JetBlue via the Northeast Alliance.

Likewise, here’s a potential mid-July itinerary from Boston to Charlotte booked via JetBlue.com that features flights operated by JetBlue and American aircraft.

Perhaps more pressing, it’s also not entirely clear what would happen to existing reservations when it comes to the reciprocal perks (for instance, elite status members hoping to enjoy their free baggage benefit) or reservations booked as part of the codeshare agreement.

That may be by design, says Florian Ederer, an associate professor at Yale University’s School of Management. His research focuses on antitrust cases, and he has closely followed this case.

“It’s not entirely clear that this is going to happen immediately,” Ederer says. “[The case] may have some ways to go.”

Ederer predicts the airlines will appeal.

In email statements to NerdWallet, both airlines criticized the judge’s decision and hinted at further legal proceedings.

“We believe the decision is wrong and are considering next steps. The Court’s legal analysis is plainly incorrect and unprecedented for a joint venture like the Northeast Alliance,” American Airlines said.

“We are disappointed in the decision,” JetBlue said. “We are studying the judgment in full and evaluating our next steps as part of the legal process.”

In accordance with federal civil case procedures, the plaintiff (in this case, the government) and defendants (in this case, the airlines) are entitled to appeal.

At its essence, this case focused on what’s ultimately good for customers. Both airlines argued in court and after the judge’s decision that their partnership has been a “win” for flyers.

“JetBlue has been able to significantly grow in constrained Northeast airports, bringing the airline’s low fares and great service to more routes than would have been possible otherwise,” JetBlue said.

“There was no evidence in the record of any consumer harm from the partnership,” American said.

But in his opinion, Judge Leo T. Sorokin argued otherwise.

“Until 2020, American and JetBlue were fierce and frequent head-to-head competitors. … The NEA changes all of that,” he wrote, raising concerns about fares and features offered as part of the partnership.

For his part, Ederer believes breaking up the Northeast Alliance may ultimately be positive for customers, calling the existing alliance a “merger in everything but name.”

“I do think that disbanding this agreement will actually reinject a healthy dose of competition, lower prices and higher quality for consumers in the Northeast,” he says.

(Top photo courtesy of JetBlue)