Judge strikes down American airline, JetBlue Alliance

A federal judge has struck down a Northeastern partnership between American Airlines and JetBlue, saying it violated antitrust laws meant to reduce competition in the industry.

U.S. District Judge Leo Sorokin on Friday ruled in favor of the Department of Justice (DOJ) and six states and the District of Columbia to end the partnership. Sorokin ruled that the deal between the two major airline companies violated the Sherman Antitrust Act, which was designed to stop monopolistic business practices that harmed competition.

The two airlines have agreed to “operate as one airline” for the majority of their flights between New York City and Boston, according to Sorokin, in an agreement called the Northeast Alliance (NEA) by 2020.

Sorokin noted that Delta Air Lines is the only other major airline with a large base in Boston, and that no other carrier besides Delta and United Airlines has the same size in New York.

“Despite the fact that the defendants claim that it is better for them to cooperate and that it will benefit the flying public, they have provided little concrete evidence to support the claim,” the governor explained. Regardless of the benefits to American and JetBlue of being more powerful in the Northeast as a whole or in their shared rivalry with Delta, those benefits stem from a tacit agreement not to compete with each other.

“Such an agreement is the type of ‘unreasonable restraint of trade’ which the Sherman Act was designed to prevent,” the ruling continues.

The airlines criticized the verdict and said they were planning to appeal.

American Airlines spokesman Matt Miller said there is no evidence of any consumer harm from NEA.

“We believe the decision was wrong and are considering next steps,” he said. “The court’s legal analysis is invalid and unprecedented for a joint venture like the Northeast Alliance.”

“We’ve made it clear during testing that the Northeast Alliance is a big win for customers,” JetBlue spokeswoman Emily Martin said.

The partnership allowed the airlines to sell seats on each other’s flights and share revenue. It covers most flights to Boston’s Logan Airport, John F. Kennedy and LaGuardia Airports in New York and Newark Airport in New Jersey.

The Trump administration allowed the NEA to go into effect in 2021, but the DOJ under the Biden administration found that consumers would be paying more than $700 million a year more because of reduced competition.

The DOJ praised the judge’s ruling in a statement, while Attorney General Merrick Garland said it was a victory for consumers who rely on competition to be able to travel at affordable prices.

“The Department of Justice will protect competition and enforce our antitrust laws in the highly integrated airline industry and across all industries,” he said.

JetBlue’s attempt to acquire Spirit Airlines is pending in Boston following a DOJ lawsuit to stop the merger.

The Associated Press contributed to this report.