Having had the federal government block plans for JetBlue to merge with Spirit Airlines (Spirit), American Airlines now finds itself in trouble with JetBlue. Once again, the US courts have intervened and demanded that American Airlines end its alliance with JetBlue within the next 30 days. The alliance was first announced in 2020 under the guise of Northeast Alliance that allowed them to start 58 new routes from four airports in New York and Boston, add flights on other routes and plan new international destinations.
The partnership went into effect in early 2021, allowing American Airlines and JetBlue to coordinate schedules and share revenue on many routes to and from New York and Boston. However, the US Department of Justice saw this move as being unfair to consumers and together with six states and the District of Columbia, in 2021 it chose to sue the alliance, based on the grounds that consumers would spend approximately US$700 million (£560 million) more than they would if the alliance didn’t exist, according to Reuters news agency and AP.
In a statement, JetBlue said it was “disappointed in the decision” and claimed the deal was “a huge win for consumers, adding that: “Through the NEA, JetBlue has 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.” “We are studying the judgment in full and evaluating our next steps as part of the legal process.”
Federal Judge Leo Sorokin wrote that: “Though the defendants claim their bigger-is-better collaboration will benefit the flying public, they produced minimal objectively credible proof to support that claim. Whatever the benefits to American and JetBlue of becoming more powerful — in the Northeast generally or in their shared rivalry with Delta — such benefits arise from a naked agreement not to compete with one another. Such a pact is just the sort of ‘unreasonable restraint on trade’ the Sherman Act was designed to prevent.”
