American Airlines' reliance on partners faces test after court ruling

American Airlines' plan to grow revenue by relying more heavily on alliance partners to ferry passengers in uncompetitive markets while bulking up flights to U.S. Sunbelt states has been called into question by a U.S. court ruling blocking a key tie-up. A U.S. federal judge last month ordered the company to end its alliance with JetBlue Airways Corp, saying the partnership "substantially" diminished competition in the domestic market. The alliance allows the carriers to coordinate flights and pool revenue. It also is a big piece of American's strategy to compete in the New York market, where it was losing money. Since the partnership started, American has ceded domestic capacity out of New York to JetBlue. It has allowed American to move away from unprofitable routes while maintaining a presence in New York. The alliance also enables the airline to feed traffic to its global partners who fly into the region. If the alliance is dissolved, it will likely be forced to rebuild its capacity or cut international flights out of the region. When asked about options Wednesday at an investor conference, CEO Robert Isom declined to share details, saying "there's a lot to be worked out." The company has called the ruling "wrongly decided" and plans to appeal, but its executives don't see a material impact to the company's earnings as the court's order is not expected to have ramifications beyond New York. American has not specified the JetBlue alliance's contribution to its earnings. But in its ruling, the court said JetBlue owed American a transfer payment upwards of $200m at the end of 2021 as part of the deal's revenue-sharing agreement.<br/>