JetBlue and American Airlines were ordered by a judge to end their alliance in the Northeast US
A federal judge in Massachusetts struck down a partnership between JetBlue and American Airlines to coordinate routes and schedules in the Northeast US, which had effectively combined the Boston and New York operations of the two carriers. Citing antitrust grounds, the judge ruled that the deal was a “naked agreement not to compete.”
The decision was a victory for the US Justice Department, which filed a lawsuit in 2021 to undo the arrangement. Now the airlines have 30 days to end the partnership, which has been running for the past 18 months, although they are expected to appeal the ruling.
The DOJ had predicted that air travelers would pay $700 million more a year if the deal was allowed to proceed.
The Northeast Alliance (NEA) allowed the airlines to share ticketing codes and revenue, and engage in joint scheduling and gate pooling. The arrangement resulted in American Airlines changing some of its business routes, and both companies argued the partnership would allow them to compete more effectively with Delta and United Airlines. The companies expanded their partnership even as the case continued to be reviewed by the court.
“We are disappointed in the decision,” a JetBlue spokesperson told Quartz in an emailed statement. “We made it clear at trial that the Northeast Alliance has been a huge win for customers. Through the NEA, JetBlue has been able 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.”
American Airlines said there was no evidence of consumer harm caused by the partnership. “The Northeast Alliance has been a huge win for customers and anything but anticompetitive,” a spokesperson told Quartz via email.
The Justice Department did not immediately respond to request for comment.
A win for the antitrust-focused Biden administration
US president Joe Biden signed an executive order in July 2021, directing his administration to break up up monopoly power across a variety of industries, including air travel.
The win in the JetBlue-American Airlines matter comes as the DOJ awaits the outcome of another lawsuit it filed, in March, to stop JetBlue from acquiring Spirit Airlines. The government is arguing that the $3.8 billion merger also would raise prices for consumers.
Spirit’s board of directors hesitated to approve the acquisition because of the DOJ’s antitrust goals, and both companies met with the DOJ in February to try to convince regulators not to sue but were unsuccessful.
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