An American Airlines plane takes off near a parked JetBlue plane at Fort Lauderdale-Hollywood International Airport on July 16, 2020 in Fort Lauderdale, Florida.
Joe Riddle | Getty Images
A federal judge ordered Friday American Airlines And JetBlue Airways To end their partnership in the Northeast, the Department of Justice won after it filed a lawsuit to back out of the alliance, arguing that it was anti-competitive.
The lawsuit, filed in September 2021, alleged that the airline alliance was effectively a merger that would harm consumers by increasing fares. The trial began a year later in Boston and concluded in December.
Both airlines expressed disappointment at the decision and said they were considering next steps.
“It makes the two partner airlines, each with a vested interest in the success of their joint and individual efforts, rather than active, long-armed competitors who regularly challenge each other in the competitive market,” said US District Judge Leo Sorokin. rolling.
Fort Worth, Texas-based American Airlines and New York-based JetBlue Airways have argued that they need a so-called Northeast Alliance to better compete with other major carriers such as Delta Air Lines and United Airlines at the region’s crowded airports.
“Whatever benefits to American and JetBlue from becoming more powerful—in the Northeast generally or in their shared rivalry with Delta—those arise from an explicit agreement not to compete with each other,” Sorokin wrote. “Such an agreement is just the kind of ‘unreasonable restraint on trade’ that the Sherman Act is designed to prevent.”
He ordered the airlines to terminate the partnership 30 days after the ruling. Carriers are likely to challenge the decision. A JetBlue spokeswoman said the company is studying the decision and evaluating next steps.
“We are disappointed with the decision,” the spokesperson said. “We made it clear during the trial that the Northeast Alliance was a huge win for customers. With NEA, JetBlue was able to grow exponentially in restricted Northeast airports, bringing airline fares and great service down more ways than would otherwise have been possible.” Unlike that “.
“The court’s legal analysis is clearly incorrect and unprecedented for a joint venture such as the Northeast Alliance,” an American Airlines spokesperson said in a statement. “There was no evidence on record of any consumer harm from the partnership, and no legal basis for inferring harm simply from the fact of the collaboration.”
Undoing the partnership will be difficult, especially during the height of the summer travel season, when airlines have already sold out.
JetBlue and American are not allowed to coordinate fares under the partnership, which was approved in the waning days of the Trump administration in 2021 and has since expanded.
JetBlue previously warned in the securities filing a judgment against NEA that “could have an adverse effect on our business, financial condition and results of operations.”
“In addition, we incur costs associated with carrying out NEA’s operational and marketing elements, which will not be recoverable if we are required to dispose of all or a portion of NEA,” the company said.
The Justice Department did not immediately respond to a request for comment.
The department separately in March filed an antitrust lawsuit to block JetBlue’s proposed acquisition of the low-cost carrier Spirit Airlinesarguing that the deal would lead to an increase in prices, “harming cost-conscious publications even more acutely”.
The combination faces a major hurdle to gaining approval from the Biden administration, which has vowed to take a hard line against what it views as anti-competitive deals.
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