Judge strikes down American Airlines, JetBlue alliance
A federal judge has struck down a partnership between American Airlines and JetBlue in the northeast, finding that it has violated antitrust laws in reducing competition in the industry.
U.S. District Judge Leo Sorokin ruled on Friday in favor of the Justice Department (DOJ) and six states and the District of Columbia that sued to stop the partnership. Sorokin ruled that the accord between the two major airline companies violated the Sherman Antitrust Act, which was designed to stop monopolistic business practices that hurt competition.
The two airlines originally signed a deal called the Northeast Alliance (NEA) in 2020 to agree to essentially “act as one airline,” in Sorokin’s words, for most of their flights in and out of New York City and Boston.
Sorokin noted that Delta Airlines is the only other major airline carrier with a large presence in Boston, and no carrier other than Delta and United Airlines has the same size in New York.
“Though the defendants claim their bigger-is-better collaboration will benefit the flying public, they produced minimal objectively credible proof to support that claim,” the ruling states. “Whatever the benefits to American and JetBlue of becoming more powerful—in the northeast generally or in their shared rivalry with Delta—such benefits arise from a naked agreement not to compete with one another.”
“Such a pact is just the sort of ‘unreasonable restraint on trade’ the Sherman Act was designed to prevent,” the ruling continues.
The airlines criticized the ruling and said they were considering appealing.
American Airlines spokesperson Matt Miller said no evidence exists of any consumer harm coming from the NEA.
“We believe the decision is wrong and are considering next steps,” he said. “The court’s legal analysis is plainly incorrect and unprecedented for a joint venture like the Northeast Alliance.”
“We made it clear at trial that the Northeast Alliance has been a huge win for customers,” JetBlue spokesperson Emily Martin said.
The partnership had allowed the airlines to sell seats on the other’s flights and share revenue. It covered most flights for Boston’s Logan Airport, John F. Kennedy and LaGuardia airports in New York and Newark Airport in New Jersey.
The Trump administration allowed the NEA to go into effect in 2021, but the DOJ under the Biden administration found that consumers would pay more than $700 million extra per year because of reduced competition.
The DOJ praised the judge’s ruling in a statement, with Attorney General Merrick Garland saying that it is a win for consumers who rely on competition to be able to travel affordably.
“The Justice Department will continue to protect competition and enforce our antitrust laws in the heavily consolidated airline industry and across every industry,” he said.
A case over JetBlue’s attempted acquisition of Spirit Airlines is pending also in Boston following a DOJ lawsuit to stop the merger.
The Associated Press contributed to this report.
Source: The Hill
