Northeast Alliance, the partnership between American Airlines and JetBlue in the US should come to an end according to a judicial ruling that sided with the US Department of Justice (DoJ) in a lawsuit against the alliance.
The alliance, between the Boston and New York operations of the two companies, was designed as a way of remaining competitive in the US northeast against Delta and United, but was seen by the DoJ as a “de facto merger” at risk of “significantly diminishing JetBlue’s incentive to compete with American elsewhere.”
Attorney General Merrick Garland said of the recent ruling: “Today’s decision is a win for Americans who rely on competition between airlines to travel affordably.
“The Justice Department will continue to protect competition and enforce our antitrust laws in the heavily consolidated airline industry and across every industry.”
Both airlines expressed disappointment at the ruling by Judge Leo Sorokin with American describing the District Court’s analysis as “plainly incorrect and unprecedented for a joint venture like the Northeast Alliance.”
A spokesperson for the company said: “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.”
Similarly, JetBlue said: “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.”
The alliance, first announced in 2020, is described by the companies as a “virtual network” which was able to close the competitive gaps faced between them and Delta and United through “codesharing, slot swaps, new international and domestic routes, better schedules and expanded frequent flier program benefits.”
However, the DoJ’s original complaint, together with six state Attorneys General and the District of Columbia, argued that the alliance would “cause hundreds of millions of dollars in harm to air passengers across the country through higher fares and reduced choice” by reducing the competition between American and JetBlue, known for its low fares.