An American Airlines plane flies near a parked JetBlue plane at Fort Lauderdale-Hollywood International Airport on July 16, 2020 in Fort Lauderdale, Florida.
Joe Raedle | Getty Images
A federal judge on Friday ruled American Airlines and JetBlue Airways to end their partnership with Northeast, a victory for the Justice Department after it sued to undo the alliance arguing it was anti-competitive.
The lawsuit, filed in September 2021, it was alleged that the alliance of airlines is effectively a merger that harms consumers by raising fares. The trial began a year ago in Boston and ended in December.
Fort Worth, Texas-based American Airlines and New York-based JetBlue Airways argue they need the so-called Northeast Alliance to better compete with other major carriers. Delta Air Lines and United Airlines at the congested airports in the region.
“Whatever the benefits of American and JetBlue being stronger—Northeast in general or their shared rival Delta—such benefits come from a bare agreement not to compete with each other, ” US District Judge Leo Sorokin wrote in his decision. “Such an agreement is just the kind of ‘unreasonable restraint of trade’ the Sherman Act was designed to prevent.”
He ordered the airlines to end the partnership 30 days after the decision. Carriers are likely to challenge the decision. The airlines did not immediately comment.
Pulling off the partnership can be difficult, especially during the peak summer travel season, when airlines sell out of tickets.
JetBlue and American will not be allowed to coordinate fares under the partnership, which was approved in the final days of the Trump administration in 2021 and since then. expanded.
JetBlue previously warned in a securities filing that a decision against NEA “could have a material adverse effect on our business, financial condition, and results of operations.
“Additionally, we will incur costs associated with implementing the operational and marketing elements of NEA, which would not be recoverable if we had to unwind all or a portion of NEA,” the company said.
The Justice Department did not immediately respond to a request for comment.
The department is separated into March filed a antitrust case to block JetBlue’s proposed takeover of the budget carrier Spirit Airlineswhich argued that the deal would increase fares, “hurting cost-conscious fliers the most acutely.”
That combination faces a high barrier for approval by the Biden administration, which has vowed to take a hard line against what it considers anticompetitive deals.