JetBlue and American Airlines have been struck a major setback after a federal judge called for a halt to their Northeast Alliance (NEA).
Siding with the US government, Leo Sorokin, the US District Court judge for Massachusetts, ruled on May 19 that the arrangement would hurt competition and raise fares. The joint venture was launched in 2021 under which the carriers sell tickets on each other’s flights and share revenue on certain services from the three major airports in New York, and at Boston/Logan.
“It makes the two airlines partners, each having a substantial interest in the success of their joint and individual efforts, instead of vigorous, arm’s-length rivals regularly challenging each other in the marketplace of competition,” Judge Sorokin wrote.
The decision marks a big victory for the US Department of Justice (DOJ), which has moved to enforce antitrust laws more aggressively, particularly in industries dominated by a few major players, such as commercial aviation. The DOJ had raised the lawsuit in September 2021, arguing the Northeast Alliance reduced competition and would cost travellers of millions of dollars a year if it remained in place; the two airlines said it provided consumers with more flying options.
The ruling requires the airlines to terminate their alliance within 30 days, though a challenge is likely with both carriers now considering their legal options.
American Airlines responded: “We believe the decision is wrong and are considering next steps. The court's legal analysis is plainly incorrect and unprecedented for a joint venture like the Northeast Alliance. There was no evidence in the record of any consumer harm from the partnership, and there is no legal basis for inferring harm simply from the fact of collaboration. The Northeast Alliance has been a huge win for customers and anything but anticompetitive.”
JetBlue added: “Through the NEA, [we have] been able to significantly grow in constrained northeast airports, bringing the airline’s low fares and great service to more routes than would have been possible otherwise.”