American Airlines, JetBlue to divest JFK, Washington slots

American Airlines (AA, Dallas/Fort Worth) and JetBlue Airways (B6, New York JFK) agreed to voluntarily divest at least seven slot pairs at New York JFK and six at Washington National as a part of a compromise agreement with the US Department of Transportation to approve the two airlines’ alliance in the north-eastern United States. At JFK, American Airlines will divest four slot pairs and JetBlue three. The divestiture will be permanent and irrevocable. In turn, the Washington National bundle, consisting of four slot pairs owned by American and two by JetBlue, will be through renewable leases to other airlines. The carriers committed to divesting the slots through two public auctions, one for JFK and one for Washington National. They are obliged to do so within a year of the agreement or three months of the expiry of the COVID-related slot utilisation waiver (which has recently been extended through October 24, 2021), whichever falls earlier. Additionally, the airlines committed to growing their collective capacity in New York, subject to penalties in the form of additional slot divestitures. American and JetBlue pledged to offer 105% of baseline capacity based on 2018-19 data at JFK and New York La Guardia in 2022, 110% in 2023 and 2024, and 115% in 2025. If the level of capacity in 2021 is below 75% of 2019’s, the thresholds will be deferred by one year each. Should the airlines fail to meet the targets, they will have to divest a further up to 10 slot pairs at JFK, including 6.5 pairs owned by American and 3.5 by JetBlue. The agreement also banned any fare or revenue management strategy discussion within or outside the partnership’s scope. The airlines also committed to annual reporting of the effects of the cooperation. JetBlue specifically pledged not to suspend any non-seasonal services from JFK once the partnership is effected. Following the agreement’s signing on January 10, 2021, the DOT terminated its review of the proposed joint venture agreement. However, the regulator retains authority to resume the investigation in the future. In a press release celebrating the DOT’s agreement, the two airlines vowed to provide a “seamless customer experience” in the North-East, improve and align their networks, and implement a two-way code-share partnership involving operations at JFK, La Guardia, New York Newark, and Boston.