On Friday, a federal judge ordered American Airlines and JetBlue to disband their Northeast Alliance, the latest happenings in an almost three-year legal battle between the airlines and the federal government.
U.S. District Judge Leo Sorokin said on Friday that the two airlines were effectively merging together 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.
“It makes the two airlines partners, each having a substantial interest in the success of their joint and individual efforts, instead of vigorous, arm’s-length rivals regularly challenging each other in the marketplace of competition,” Sorokin wrote in the ruling.
He called the alliance “the sort of ‘unreasonable restrain on trade’ the Sherman Act was designed to prevent.”
In the original complaint from 2021, the Justice Department said that the partnership between American, the largest airline in the world, and JetBlue, a “uniquely disruptive low-cost airline,” was an “unprecedented and anticompetitive pact.”
“Under their so-called “Northeast Alliance,” the two rivals have quietly agreed to share their revenues and coordinate which routes to fly, when to fly them, who will fly them, and what size planes to use on flights to and from four major airports,” which are Boston Logan, JFK International, LaGuardia, and Newark Liberty.
“The Northeast Alliance will 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. It will also closely tie JetBlue’s fate to that of American, diminishing JetBlue’s incentives to compete with American in markets across the country,” the complaint read.
The news is a win for those who had sought to stop the rapid consolidation of the airline industry, which has seen alliances, including one world, SkyTeam, and Star Alliance, control the vast majority of traffic between the United States and Europe, and other major consolidation, such as the American merger with U.S. Airways in 2013, get the go ahead.
That includes the Justice Department, which filed a separate lawsuit in March to block JetBlue’s proposed acquisition of Spirit Airlines.