A US District Court judge ruled on Friday that American Airlines and JetBlue Airways must end their alliance on Northeast US travel routes.
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The Biden administration won its long-running case against the airlines’ cooperation when US District Judge Leo Sorokin decided in favor of the Justice Department. The Justice Department filed the complaint in 2021, stating that the two businesses increased costs and limited options for travelers flying to and from important Northeastern destinations including Boston and New York City.
Just as the hectic summer travel season gets underway, Sorokin decided that the airlines have 30 days to quit their alliance.
“It is abundantly clear to the Court that the defendants’ primary motivation in establishing the NEA was to strengthen their own competitive positions against Delta (and, to a lesser extent, United) in Boston and New York,” Sorokin said in the decision on Friday.
According to the judge’s decision on Friday, both airlines—American Airlines Group, the largest airline in the world, and JetBlue, the sixth-largest airline in the United States, which has a considerable market share in the Northeast in particular—are “formidable and influential players” in the aviation industry.
The Justice Department claimed in its lawsuit that the two businesses exchanged information on which routes would be flown when they would be flown, who would be the pilots, and what size planes would be used for each flight. In 2020, the partnership was formed.
The airlines asserted that corporate travelers and frequent flyers had more access to perks and discounts due to the alliance’s codesharing provisions. But Sorokin determined that these tourists only make up a small part of America’s clientele.
The schedule optimization and coordination, according to the judge, “has resulted in decreased capacity, lower frequencies, or reduced consumer choices on multiple routes, including some that are heavily traveled.” According to Sorokin, it effectively eliminated an entire competition from these areas, giving customers fewer options for traveling between hubs like Boston’s Logan and New York’s LaGuardia airports.
Sorokin claimed that their agreement constitutes an “unreasonable restraint on trade” in violation of the Sherman Act, a key antitrust statute.
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Even while the defendants assert that their bigger-is-better relationship will benefit the flying public, Sorokin said that there was little objectively trustworthy evidence to back up that assertion.
Additionally, the Justice Department said that the two airlines split the profits made at these airports, which removed any motivation for them to compete. The “Northeast Alliance” also permitted the parties to pool their “slots,” or permissions for takeoff and landing, according to the complaint.
The DOJ’s Antitrust Division Assistant Attorney General Jonathan Kanter said he was “pleased” with the choice in a statement on Friday.
Attorney General Merrick Garland stated on Friday that “today’s decision is a win for Americans who rely on competition between airlines to travel affordably.”
American Airlines stated in a statement that it is “disappointed” in the court’s ruling and that it is “studying the judgment in full” and determining its “next steps as part of the legal process.”
“We made it very clear at trial that the Northeast Alliance has been a huge win for customers,” American stated. JetBlue has been able to expand rapidly in limited northeast airports thanks to the NEA, opening up more routes to the airline’s low prices and excellent service than would have been possible otherwise.
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JetBlue has been contacted by CNN for comment.
The Justice Department filed a lawsuit in March to block JetBlue’s $3.8 billion bid to acquire Spirit Airlines.
Garland claimed that the merger will seriously hurt customers, especially those who depend on Spirit Airlines’ inexpensive prices.