American Airlines argues for right to have partnerships in JetBlue appeal

American Airlines Group Inc. pushed a federal appeals court to overturn a decision invalidating its partnership with JetBlue Airways Corp., saying the ruling would prevent the airline from entering into future joint ventures.

Gregory G. Garre, a lawyer for American, said the trial judge’s decision to invalidate the Northeast Alliance rested on a legal misunderstanding of how the antitrust laws operate.

Eliminating JetBlue as a competitor “in itself is not anti-competitive,” Garre told a three-judge panel on the 1st US Circuit Court of Appeals in Boston. “You have to link it to actual consumer harm in the marketplace in the form of increase in price or output reduction.”

Following a trial, US District Judge Leo Sorokin found that the Northeast operating alliance between the two airlines violated antitrust laws. American and JetBlue said they created the agreement to compete more effectively in the New York City and Boston areas with Delta Air Lines Inc. and United Airlines Holdings Inc.

After the ruling, JetBlue ended its fight for the partnership but American appealed. At Monday’s argument, Garre said the injunction issued by Sorokin would prevent American from entering into future partnerships for the next 10 years.

“We do want to go forward with similar arrangements,” he said.

Justice Department lawyer Daniel Haar argued that antitrust prosecutors demonstrated that the partnership impacted the number of flight options available for consumers.

“We know that before the NEA was established, this competition was directly benefiting consumers, and it’s all been wiped out,” Haar said, of the Northeast alliance between the carriers. “The average passenger is not looking for a bigger network, but looking for point-to-point travel and the NEA has not revolutionized that.”