American Airlines plans to appeal a U.S. federal judge’s decision against its Northeast Alliance partnership with JetBlue, American CEO Robert Isom said last week at the Bernstein 39th Annual Strategic Decisions Conference.
“We’ve got a legal system that will ask for appeal, and we’re going to do that,” Isom said. “And as we look forward, I think that the kind of benefits that we’ve proposed will ultimately prevail. But in the meantime, we’re going to have to work with the [U.S. Department of Justice], work with JetBlue to find out exactly what we do in the interim.”
When asked what kind of affect the breakup of the NEA would have on the carrier for New York, Isom responded that the region accounts for less than 5 percent of American’s total capacity, outside of hub flights. “By the end of the day, it won’t have a material short-term impact,” he said.
American CFO Devon May concurred on the capacity affect and added that with the carrier’s “New York strategy” isn’t “something that is really impactful to earnings” or projections.
Prior to the conference, American issued updated guidance in a filing with the U.S. Securities and Exchange Commission. It kept projected second-quarter capacity at previously forecast level of a 3.5 percent to 5.5 percent increase year over year. Fuel projections were reduced to $2.55 to $2.65 per gallon from $2.65 to $2.75 per gallon. Total revenue per available seat mile is projected to decline 1 percent to 3 percent, versus a prior forecast of a decline of 2 percent to 4 percent.
