American Airlines Asks Court to Overturn Northeast Alliance Ruling

American Airlines has asked a U.S. Circuit Court of Appeals to consider overturning a previous ruling that struck down its Northeast Alliance partnership with JetBlue.

In a brief filed with the 1^st U.S. Circuit Court of Appeals in Boston this week, American said the previous decision by U.S. District Judge Leo Sorokin, which said the two must end their partnership, could mean significant change in the air industry.

Mainly, the brief said, the decision to terminate the alliance, despite the “absence of any showing of consumer harm” could discourage pro-consumer partnerships, such as the Northeast Alliance, in the future.

“If left unchecked, the district court’s decision will discourage fruitful and lawful collaboration that benefits consumers through increased output, decreased prices, and improved product quality,” American wrote in the brief.

The Northeast Alliance was in place for a little over a year and a half when Judge Sorokin ruled against it. According to the brief, during those 20 months it was active, “flight output—including the number of flights, seats, and options—increased at NEA airports without any relative increase in price.” And, even with that, the “DOJ and several states filed suit and alleged that the NEA violated Section 1 of the Sherman Act.”

American’s appeal recognized that while its partnership with JetBlue was over, overturning the decision would lift an injunction that bars American and JetBlue from entering any other partnerships for the next decade.

Judge Sorokin’s original ruling came down last May. In the ruling, Sorokin said that the two airlines were effectively merging in the Northeast, cutting competition that’s vital for fair pricing and consumer choice.

In his opinion, Judge Sorokin noted that the partnerships at the two airlines were effectively merging with the alliance, cutting competition and driving up prices for consumers in the Northeast. 

According to Sorokin, the alliance essentially destroyed competition between two major U.S. airlines, making them collaborators instead of competitors. It especially stopped competition between a major legacy airline in American and another airline that was geared to be a disruptive force in the industry and compete with American and other legacy carriers. 

JetBlue, for its part, is currently fighting for approval for its acquisition of Spirit Airlines, an acquisition that is also the subject of an antitrust case from the Department of Justice. The ruling on that case should come down soon—closing arguments took place last week.