American Airlines and JetBlue have been ordered by a US federal judge to terminate their partnership, which covers flights across the northeastern US.[0] The partnership, called the Northeast Alliance, was designed to allow the two airlines to better compete in the region against rivals such as Delta Air Lines and United Airlines. However, the US Department of Justice filed a lawsuit in 2021, alleging that the partnership raised prices and reduced choice for air passengers traveling to and from major cities in the Northeast, such as New York City and Boston.[1] The court ruling concurred with antitrust authorities that the alliance could lessen competition and increase airfares.[2]
American Airlines and JetBlue have argued that the Northeast Alliance would have allowed them to grow and become more powerful in the region. JetBlue stated that the partnership had enabled the airline to grow in constrained northeast airports, bringing the airline’s low fares and great service to more routes than would have been possible otherwise.
The ruling made by Judge Leo T. Sorokin of the U.S. District is a triumph for the Justice Department. The department has ramped up its inspection of potential agreements in sectors where it believes that insufficient competition is adversely affecting consumers under the Biden administration.[3] If the two airlines received a positive verdict, specialists predicted that it could have encouraged other carriers to establish comparable collaborations.[3]
The ruling could also have implications for JetBlue’s proposed acquisition of Spirit Airlines, which the Justice Department sued to block earlier this year, arguing that it, too, would violate antitrust laws.[1] JetBlue had made a surprise bid to purchase low-cost carrier Spirit Airlines for $3.8 billion.[4] Shareholders voted to accept the JetBlue buyout, but the acquisition has yet to be finalized.[5]
The court ruling could also have wider implications for the airline industry, as it could set a precedent for other antitrust cases. The Biden administration has signaled that it will take a tougher stance on antitrust enforcement, particularly in industries where there is a lack of competition.
In a statement, American Airlines said it is “disappointed” in the court’s decision and that it’s “studying the judgment in full” and evaluating its “next steps as part of the legal process.” JetBlue added that it was “disappointed in the decision and evaluating its next steps as part of the legal process.
0. “Judge orders JetBlue and American to dissolve their Boston-New York alliance” Travel Weekly, 19 May. 2023, https://www.travelweekly.com/Travel-News/Airline-News/Judge-orders-JetBlue-and-American-dissolve-Northeast-Alliance
1. “Justice Department wins lawsuit to end JetBlue and American Airlines alliance” kuna noticias y kuna radio, 19 May. 2023, https://kesq.com/money/cnn-business-consumer/2023/05/19/justice-department-wins-lawsuit-to-end-jetblue-and-american-airlines-alliance/
2. “Antitrust Ruling Dissolves American Airlines and JetBlue’s Northeast Alliance” Aviacionline, 19 May. 2023, https://www.aviacionline.com/2023/05/antitrust-ruling-dissolves-american-airlines-and-jetblues-northeast-alliance/
3. “Justice Department wins bid to block American, JetBlue alliance” The Washington Post, 20 May. 2023, https://www.washingtonpost.com/transportation/2023/05/19/american-jetblue-northeast-alliance-doj
4. “US judge rules against American Airlines, JetBlue partnership” Al Jazeera English, 19 May. 2023, https://www.aljazeera.com/economy/2023/5/19/us-judge-rules-against-american-airlines-jetblue-partnership
5. “Why JetBlue and American Airlines Were Ordered to End Pact” AFAR Media, 20 May. 2023, https://www.afar.com/magazine/why-jetblue-and-american-airlines-were-ordered-to-end-pact