An American Airlines plane takes off near a parked JetBlue plane on the Fort Lauderdale-Hollywood International Airport on July 16, 2020 in Fort Lauderdale, Florida.
Joe Raedle | Getty Images
A federal judge Friday ordered American Airlines and JetBlue Airways to finish their partnership within the Northeast, a win for the Justice Department after it sued to undo the alliance arguing it was anti-competitive.
The lawsuit, filed in September 2021, alleged that the airlines’ alliance was effectively a merger that might hurt consumers by driving up fares. The trial began a 12 months later in Boston and wrapped up in December.
Each airlines expressed disappointment with the choice and said they were considering next steps.
“It makes the 2 airlines partners, each having a considerable interest within the success of their joint and individual efforts, as an alternative of vigorous, arms-length rivals often difficult one another within the marketplace of competition,” U.S. District Judge Leo Sorokin said in his ruling.
Fort Value, Texas-based American Airlines and Recent York-based JetBlue Airways argued they needed the so-called Northeast Alliance to raised compete with other large carriers Delta Air Lines and United Airlines in congested airports within the region.
“Regardless of the advantages to American and JetBlue of becoming more powerful — within the northeast generally or of their shared rivalry with Delta — such advantages arise from a unadorned agreement to not compete with each other,” Sorokin wrote. “Such a pact is just the form of ‘unreasonable restraint on trade’ the Sherman Act was designed to stop.”
He ordered the airlines to finish the partnership 30 days after the ruling. The carriers are prone to challenge the choice. A JetBlue spokeswoman said the carrier is studying the choice and evaluating next steps.Â
“We’re disenchanted in the choice,” the spokesperson said. “We made it clear at trial that the Northeast Alliance has been an enormous win for patrons. Through the NEA, JetBlue has been in a position to significantly grow in constrained northeast airports, bringing the airline’s low fares and great service to more routes than would have been possible otherwise.”
“The Court’s legal evaluation is plainly incorrect and unprecedented for a three way partnership just like the Northeast Alliance,” an American Airlines spokesman said in a press release. “There was no evidence within the record of any consumer harm from the partnership, and there is no such thing as a legal basis for inferring harm simply from the actual fact of collaboration.”
Undoing the partnership can be difficult, especially in the course of the peak summer travel season, which airlines have already sold tickets for.
JetBlue and American will not be allowed to coordinate fares under the partnership, which was approved in the ultimate days of the Trump administration in 2021 and has since expanded.
JetBlue had previously warned in a securities filing a ruling against the NEA “could have an hostile impact on our business, financial condition, and results of operations.
“Moreover, we’re incurring costs related to implementing operational and marketing elements of the NEA, which might not be recoverable if we were required to unwind all or a portion of the NEA,” the corporate said.
The Justice Department didn’t immediately reply to a request for comment.
The department individually in March filed an antitrust lawsuit to dam JetBlue’s proposed acquisition of budget carrier Spirit Airlines, arguing the deal would drive up fares, “harming cost-conscious fliers most acutely.”
That combination faces a high hurdle for approval by the Biden administration, which has vowed to take a tough line against what it views as anti-competitive deals.
