Judge rules that American and JetBlue must end their alliance
American Airlines must end its alliance with JetBlue Airways within 30 days, a federal judge ruled Friday, agreeing with the U.S. Department of Justice that the deal means higher prices for consumers.
The decision represented a victory for President Joe Biden’s administration, which has taken a hard line on consolidation and tie-ups in the aviation industry. The Justice Department, six states including Massachusetts as well as the District of Columbia sued in 2021 to unwind the deal announced in 2020, calling the “Northeast Alliance” a “de facto merger” of the American and JetBlue Boston and New York operations that removes incentives for them to compete.
In his ruling, U.S. District Judge Leo Sorokin said the partnership “substantially diminishes competition in the domestic market for air travel.”
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“These two powerful carriers act as one entity in the northeast, allocating markets between them and replacing full-throated competition with broad cooperation,” the judge wrote.
Both airlines said after the ruling they were evaluating their next steps.
JetBlue said it was disappointed with the decision and that the “Northeast Alliance has been a huge win for customers” by extending the airline’s low fares “to more routes than would have been possible otherwise.”
American said, “The court’s legal analysis is plainly incorrect and unprecedented for a joint venture.” It added that the alliance “has been a huge win for customers and anything but anticompetitive.”
U.S. Attorney General Merrick Garland described the judge’s decision as “a win for Americans who rely on competition between airlines to travel affordably.
Recall that the American-JetBlue partnership was approved by the U.S. Department of Transportation shortly before the end of former President Donald Trump’s administration.
By Diane Bartz and David Shepardson – Reuters
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