An American Airlines plane takes off 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 ordered Friday american airlines AND JetBlue Airways end their partnership within the Northeast, a victory for the Department of Justice after it sued the alliance to dissolve the alliance, arguing that it was anti-competitive.
The lawsuit, filed in September 2021, alleged that the airline alliance was in truth a merger that will harm consumers by raising prices. The trial began a 12 months later in Boston and resulted in December.
Each airlines expressed disappointment at the choice and said they were considering next steps.
“This makes the 2 airlines partners, each with a big interest within the success of their joint and individual efforts, fairly than vigorous rivals who repeatedly compete against one another within the competitive market,” U.S. District Judge Leo Sorokin said in his address. . ruling.
Fort Price, Texas-based American Airlines and Latest York-based JetBlue Airways argued that they needed the so-called Northeast Alliance to higher compete with other major carriers Delta Air Lines and United Airlines at congested airports within the region.
“Regardless of the advantages to the Americans and JetBlue of becoming more powerful – within the Northeast normally or in joint competition with Delta – such advantages come from a unadorned deal not to compete with one another,” Sorokin wrote. “Such a pact is solely a sort of ‘unreasonable restriction of trade’ that the Sherman Act was intended to prevent.”
It ordered the airlines to end their cooperation 30 days after the ruling. Carriers are likely to appeal this decision. A JetBlue spokeswoman said the airline was reviewing the choice and evaluating the following steps.
“We’re dissatisfied with this decision,” the spokesman said. “Throughout the trial, we made it clear that the Northeast Alliance was an enormous win for purchasers. Thanks to NEA, JetBlue has been able to grow significantly within the restricted Northeast airports, providing low fares and excellent service to the airline on more routes than otherwise would have been possible.” possible otherwise.”
“The Court’s legal evaluation is clearly flawed and unprecedented for a three way partnership equivalent to the Northeastern Alliance,” an American Airlines spokesperson said in a press release. “There was no evidence within the file of harm to the patron from the partnership and there is no such thing as a legal basis for inferring harm simply from the very fact of the partnership.”
Dissolving the partnership could be difficult, especially at the height of the summer tourist season for which airlines have already sold tickets.
JetBlue and American cannot coordinate tariffs in a partnership that was approved within the last days of the Trump administration in 2021 and since then expanded.
JetBlue previously warned in securities filing a judgment against NEA “could have an adversarial impact on our business, financial condition and results of operations.
“As well as, we incur costs related to the implementation of NEA’s operational and marketing elements, which might not be recoverable if we had to liquidate all or a part of NEA,” the corporate said.
The Department of Justice didn’t immediately respond to a request for comment.
The department individually filed a grievance in March antitrust lawsuit block JetBlue’s proposed takeover of the budget carrier Spirit Airlinesarguing that the deal would raise prices, “most severely hurting cost-conscious aviators.”
This mixture faces major hurdles for approval by the Biden administration, which has promised to take a tricky stance against what it considers anticompetitive deals.