How JFK Changed for American and JetBlue in the Northeast Alliance

American, JetBlue

Just last week I took a look at how American and JetBlue had changed their presence at New York’s LaGuardia airport once they entered into the Northeast Alliance (NEA). Today, let’s hop on the Van Wyck and take a look a JFK. This one is a little messier.

At LaGuardia, it was pretty clear what happened. American upgauged its 50-seat aircraft to larger regionals, reduced hub-to-hub flying, and left several markets to its new partner. Meanwhile, it leased out slots to JetBlue which that airline could use to build up its previously-small LaGuardia presence. Together, the airlines could use their different products to comprehensively cover LaGuardia within the 1,500 mile perimeter.

At JFK, it’s a different story. JetBlue already had an enormous operation at JFK which covered most of the key US and Caribbean markets. American had a shell of an operation which primarily served Transcon markets that couldn’t fly from LaGuardia due to the perimeter rule and long-haul routes (Barcelona, Buenos Aires, London, Madrid, Milan, Paris, Rome, and Sao Paulo) along with some hub-to-hub flying and short-haul feed to keep those long-haul airplanes full.

With all this massive feed from JetBlue, American felt emboldened to grow that long-haul operation. It cut some of those Transcon flights that it could cede to JetBlue, but those had very little capacity anyway. Instead, it poured airplanes into the Atlantic, not just in existing markets but also in adding Athens, Delhi, Doha, and Tel Aviv.

But capacity didn’t just grow there. It grew in the domestic market as well. This isn’t just about upgauging from 50-seaters to larger regionals though that helps. Overall, domestic seats are up more than 36 percent comparing July 2023 to July 2019. The only markets which are down, excluding those which were exited? It’s the hubs in Charlotte and Phoenix along with the Transcons to LA and San Francisco. Everything else is up as American tries to rev its long-haul engine at JFK.

As for JetBlue, well, it wasn’t sitting still in this. It did start a variety of new markets while cutting only a few, some of which like Long Beach and Oakland were due to larger structural issues and not the NEA as you can see below.

But what about existing routes? This is where it’s particularly interesting, as you’ll see in the map below. JetBlue, able to add more domestic flights from LaGuardia thanks to those slots from American, reduced capacity on a variety of domestic routes, primarily north-south. Instead, it started those routes shown in the map above but it also increased capacity into the Caribbean where LaGuardia isn’t an option since it has no customs and immigration facility. Here’s a look at routes that saw seats change by more than 10 percent (up or down) between July 2019 and July 2023.

Looking at LaGuardia and JFK together, we see that JetBlue was able to shift more domestic flying from JFK to LaGuardia. That allowed the airline to increase coverage beyond the US at JFK. (I didn’t even mention the non-NEA routes to London, Paris, and soon Amsterdam which JetBlue is starting.) At the same time, American was able to grow its long-haul flights where JetBlue can’t reach from JFK.

Together, American and JetBlue were able to grow their capacity in all markets and become a more successful competitor to Delta and United in New York. Of course, as we’ve learned, that doesn’t seem to matter.

Get Cranky in Your Inbox!

The airline industry moves fast. Sign up and get every Cranky post in your inbox for free.

15 comments on “How JFK Changed for American and JetBlue in the Northeast Alliance

  1. “”Together, American and JetBlue were able to grow their capacity in all markets and become a more successful competitor to Delta and United in New York. Of course, as we’ve learned, that doesn’t seem to matter”.

    The truth is that it does matter, but then again this is not the “free market” economy that we’ve been taught that it is.

  2. Just seems like the judicial and legislative people making decisions about this have no actual understanding of aviation, and what is good or not.

  3. let’s not forget that the whole genesis of the NEA was a note from the DOJ telling AA that they had to use their slots at levels required by FAA slot controls- which was not happening for years before covid – or lose them.
    Unlike Newark where UA was the dominant carrier and where the best option to get more competition since UA was not using its slots according to FAA requirements was to remove full slot controls, that wasn’t an option at either LGA or JFK since AA wasn’t the largest slot holder and removing slot controls would probably allow even larger carriers to add more flights. w
    The DOT approved of the slot transfer process of the NEA and approved plans by AA and B6 to increase use of its slots over a period of years – which was interrupted by covid – but no one should laud AA for adding more flights because that was exactly what the DOT required.
    AA and B6 got into trouble with the DOJ because cooperating to control capacity or revenue by two domestic airlines is not permitted and has never been with approved before on anywhere close to a similar basis as with the NEA.

    The DOJ also made clear and the judge backed the DOJ in noting that there is no justification to break one law in order to increase one’s competitive position or to offer greater benefit to consumers if that benefit is gained by breaking a law. The DOJ and the court both stated that at AA and B6’s repeated argument that they were better able to compete with DL and UA because of the NEA is not a legally valid justification for maintaining the NEA.

    The real question that remains outstanding is what AA and B6 will do with their networks at each of the impacted airports by the DoJ’s win as well as the associated slots at LGA and JFK.

  4. Burbank data may not be a great example. It went from 1 320, to 3 320’s to 2 321’s to 1 321 back to a 320.

  5. I’m pretty sure the deadline to appeal the judgment is approaching quickly. It’ll be interesting to see if JetBlue joins Ameican (since the latter has publicly stated it will appeal).

    Tim Dunn’s above comment is the first time I’ve ever seen it asserted that American’s failure to utilize its JFK slots was the genesis of the NEA. If I’m wrong, which is quite possible, I’m happy to be corrected – if a credible source (not someone’s opinion) is cited. Regardless, it’s interesting to see what the airlines have done at both LGA and JFK. My thanks to Cranky for that insight.

    The Sherman Anti-trust Act does not prohibit joint ventures. There are lots of joint ventures in this country that operate quite legally. Two domestic airlines forming a joint venture isn’t specifically prohibited under the Act. A judgment is strictly one judge’s interpretation of the law. Those interpretations are often overturned on appeal. The ruling of one judge isn’t the final word. Appeals can take years. It’ll be interesting to see how long this drags out – if it does.

    The Sherman Act was passed in 1890. Lots has changed since then. If I remember my history correctly, one of the targets of the Act was James J. Hill’s Northern railroad “monopoly”. The Act simply caused a restructuring. The lines involved were later merged into Burlington Northern, which is now part of an even bigger railroad, BNSF – which is owned by Warren Buffet’s Berkshire Hathaway. BNSF is the only railroad that serves much of its territory, yet it wasn’t challenged. All of which apparently shows how arbitrary laws and their enforcement can often be. But some of it is also the intervening 130 years. BNSF now has trucking competition, which was virtually non-existent back in 1890.

    Regarding the airlines and their regulation (which is part of the bigger question, IMHO): Do we as a country really want to return to the days of the early 2000’s when virtually every major airline (including the world’s only perfect airline) filed for Chapter 11 protection?

    1. first, it is stunning that you don’t realize that the reason for the beginning for the NEA was because AA was underutilizing its slots. That is firmly established in the DOT’s order approving the slot portions of the NEA.
      Second, the DOT NEVER approved or granted antitrust approval to AA and B6.
      No two US companies of any size in the same industry cannot cooperate to control capacity or share revenue without antitrust immunity and a joint venture. AA and B6 simply did not have it.
      Third, AA and B6 clearly stated over and over again in testimony that became public that their intent was to cooperate in order to reduce competition which is a clear violation of the very laws that you say you are an expert about.
      There is no basis for an appeal.
      fourth, if AA can’t be profitable on its own, then they should be liquidated and their assets distributed to other airlines that can use them properly.
      You continue to tout the copout that the industry can’t make it if AA can’t cooperate w/ B6 and that is as wrong as it can be. AA is better off financially than they have been in 2 decades. They just have no business operating in much of the NE when their southern hubs are doing as well as they are. AA won’t file for bankruptcy and they didn’t generate a single joint corporate contract under the NE. The NEA was solely about swapping leisure passengers which do nothing for AA’s bottom line.
      The only reason why AA Is going through the motion is to to delay the inevitable pulldown of its NE operations in NYC and BOS which they have proven cannot be profitable on a standalone basis. B6 recognizes it makes more sense to move on and get their merger passed esp. since they were giving more to AA than the other way around.

      1. Well, Darn it. No basis for an appeal. Sorry aa. Tim Dunn has spoken. The district judge is the final say on the Sherman act and your lawyers specializing in antitrust law don’t know what they’re talking about.

        Just reading Tim in every comment section across the internet could’ve saved DOT approving the nea and AA a lot of time and money.

        1. first, the DOT did not approve antitrust immunity or revenue sharing or a joint venture. the DOT approved the slot aspects of the transaction.
          I do not know the sequence of what took place – whether AA and B6 revealed their full plans to the DOT before they approved what they did – but the DOJ’s very quick notice after the NEA launched provides plenty of evidence that no party in the US government approved the parts of the NEA over which the DOJ sued.

          An appeal is based on a finding of incorrect judicial interpretation and not because you just don’t like the judge’s decision. Given that the DOJ and a federal judge – two entities from two branches of government – said the NEA as constructed was illegal, the chances are high that it really is.

          AA presented documents in trial which said they knew the NEA was legally risky – but they did it anyway.

          The NEA was AA’s last best hope to hold onto their slots based on a plan to get someone else to help fund the NE operation which AA had not itself been able to profitably do for years.

          I’m still not sure how an AA appeal matter is B6 doesn’t want to also appeal. B6 has other options but AA does not. AA does have a robust, growing and profitable southern hub network.

          1. AA doesn’t dictate what’s legal and illegal. They consider what is via legal advice and make decisions from there then looking to DOT/DOJ to determine whether their request is legal or illegal. The idea that they should be judged in court off legal advice to them is just Tim’s normal Delta pro-bias rant and poorly thought out response. The judge can say whatever he wants and he’s absolutely qualified to, but he’s hardly the line on antitrust law. He’s a district law, never been above it.

            It’s hardly AA/B6’s fault that they asked the appropriate government department for clarification and approval, DOT. And, under a separate administration, DOT/DOJ determined it was legal. Sure, the Trump administration had some chaos… but the idea that DOT was off in their own land making decisions separate from DOJ is a bit of a passport plum fantasyland. (AKA. Tim’s mind 24/7)

            The new administration disagreed. That’s what happened. The NEA was legal and probably would be upheld on appeal (though I would never make a dogmatic statement saying it absolutely would; how would either of us know) but B6 is more inclined toward dealing with their NK merger than the NEA, which is their prerogative.

            1. I agree with what you’re saying but didn’t you get your name off a hair dryer?

            2. Max,
              the antitrust immunity, revenue sharing and joint venture components of the Northeast Alliance were not approved by the DOT or any other government agency under any administration. They simply were not.
              The DOT did approve the slot transfer and schedule coordination components.

              However, as I have noted, a substory of the entire NEA case was that the DOJ challenged the DOT’s authority to engage in domestic antitrust review because that is not what the DOT has been given authority to do. The DOT’s antitrust authority has been used only for review of international joint venture applications and even then the DOJ has always had the right to weigh in. It’s tough when a company gets caught in the middle of a spat between two government agencies but documentation from the trial specifically noted that AA knew that the joint venture and revenue sharing were legally risky – and the DOJ confirmed that when it filed suit against the NEA shortly after it was implemented by AA and B6.

              And the chances of succeeding at an appeal are highly unlikely given that AA and B6 specifically said in documentation in the trial that their intention was to reduce capacity in certain markets – which is a violation of US law.

              Continuing to believe something that is factually inaccurate only delays accepting the inevitable conclusion that the NEA is dead. The judge gave AA and B6 the option to salvage the NEA with a simple codesharing and loyalty program arrangement similar to what AA and AS has. However, the DOJ says that AA and B6 have to apply for those elements; interestingly, though, the DOT does have authority to approve those elements and routinely does for other airlines but they were not part of the original DOT approval.

              You can easily find the DOT order issued on Jan 10, 2021 by googling “dot order approving northeast alliance”

  6. I’m starting to wonder what happened to the JetBlue non stop from JFK to ANU (Antigua). All of a sudden there are no flights scheduled for September/October which we flew every year. We can’t get answers. American has flights, but not non stop to the NY area!
    Only on return.

  7. There is something way funky going on with the Burbank – JFK flight. Eastbound, it is now a red eye that gets in to JFK at just before 5 in the morning. Yeeesh!

  8. Is there no escaping Tim Dunn’s dismissive and condescending reactions to others on these blogs? @tired

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Cranky Flier