Jetblue defends American alliance in court

WASHINGTON Reuters -- JetBlue Chief Executive Robin Hayes staunchly defended his company's alliance with larger rival American Airlines on Wednesday, denying the U.S. government's claims that the agreement would defang the low-cost carrier.

The U.S. Justice Department, six states and the District of Columbia are asking a federal judge in Boston to order the two carriers to discontinue their Northeast Alliance NEA, which they call a merger of their Boston and New York operations to the detriment of travelers, who face $700 million in extra annual costs.

Hayes said JetBlue did not consult with American on pricing in the northeast or anywhere else, and did not pull its punches in competing with American. He testified before Judge Leo Sorokin, who will decide the case, outside of the NEA.

Hayes said JetBlue had been interested in joining the alliance to fend off competition from Delta Air Lines in Boston and expand in the congested New York area airports.

He said that JetBlue had had 150 or 160 departures a day at JFK before the alliance but is now up to 200 using what had been American slots.

He said that JetBlue, which has a reputation in the industry of being a disruptor, has no plans to change and entered the Northeast Alliance because it will allow JetBlue to accelerate our business model in the northeast.

JetBlue has a plan to buy the low cost rival Spirit SAVE.N, a deal that is expected to face a tough antitrust review.

American, Delta, United and Southwest Airlines control more than 80% of domestic travel, a result of airline mergers in recent years, according to the government.