19 May 2023
Breaking up is hard to do. But for JetBlue and American Airlines, there isn’t much of a choice.
A federal judge ruled against the Northeast Alliance between American Airlines and JetBlue on Friday, May 19, ending a prolonged anti-trust suit more than a year after the Department of Justice accused the partnership of stifling competition.
As part of the decision, the judge ruled that the alliance between the two carriers must end within 30 days. It was not immediately clear how the decision would be implemented, nor what it would mean for frequent flyers.
“The NEA [Northeast Alliance], operating as it was designed and intended by American and JetBlue, substantially diminishes competition in the domestic market for air travel. It does so by combining the Boston and New York operations of two airlines that are among the most significant competitors in that region,” reads Friday’s decision penned by Judge Leo T. Sorokin.
In the suit, the Justice Department alleged that by codesharing and collaborating to run complementary route networks through New York and Boston, the alliance would “eliminate significant competition between American and JetBlue that has led to lower fares and higher quality service for consumers traveling to and from those airports.”
American and JetBlue, however, aggressively defended the pact, which the airlines said allows them to offer stronger competition against Delta and United — which dominate the Northeast market — than either airline could do alone. While JetBlue has a strong presence in the Northeast, it remains relatively small and has less of a presence elsewhere in the country.
Although American Airlines remains large, its New York presence has shrunk significantly since the early 2000s, and it can’t significantly add service due to slot restrictions in New York.
During a three-week trial in U.S. District Court in Boston, Judge Sorokin heard testimony from current and former executives at both airlines, as well as competitors, along with industry experts and economists.
The airlines’ defense centered on the argument that in the 18 months since the alliance began, the cost increases that the DOJ warned about in its initial complaint have failed to materialize. The airlines said they have increased capacity in the Northeast region and “improved the quality of travel to and from Boston and New York” through “collaborative scheduling, codesharing, and frequent flyer program integration.”
The two airlines didn’t immediately comment on the news.
Additional reporting Zach Griff. This is a developing story and will be updated.