US court says American, JetBlue must cease cooperation

Robert Besser
23 May 2023, 04:37 GMT+10

US District Judge Leo Sorokin in Boston ruled last week that American Airlines and JetBlue Airways must abandon their partnership in the US northeast United States
The Biden administration has proven that the agreement reduces competition in the airline industry
The ruling comes after the administration has aggressively enforced antitrust laws to combat mergers and other uncompetitive arrangements between major companies

BOSTON, Massachusetts: US District Judge Leo Sorokin in Boston ruled last week that American Airlines and JetBlue Airways must abandon their partnership in the US northeast United States, as the Biden administration has proven that the agreement reduces competition in the airline industry.

The ruling comes after the administration has aggressively enforced antitrust laws to combat mergers and other uncompetitive arrangements between major companies.

During the trial last year, the Justice Department argued that the merger would eventually cost consumers hundreds of millions of dollars annually.

American and JetBlue violated antitrust laws as they carved up Northeast markets between them, "replacing full-throated competition with broad cooperation," Sorokin wrote in his decision.

The two airlines offered only minimal evidence that the partnership, called the Northeast Alliance, benefitted consumers, he added.

In response, the airlines said they were deciding whether to appeal.

"We believe the decision is wrong and are considering next steps. The court's legal analysis is plainly incorrect and unprecedented for a joint venture like the Northeast Alliance. There was no evidence in the record of any consumer harm from the partnership," said American spokesman Matt Miller.

JetBlue spokeswoman Emily Martin said, "We made it clear at trial that the Northeast Alliance has been a huge win for customers."

Meanwhile, the Justice Department lauded the ruling, with Attorney-General Merrick Garland stating, "Today's decision is a win for Americans who rely on competition between airlines to travel affordably."

When it came into force in 2021, the partnership, which allowed airlines to sell seats on each other's flights and share revenue from them, was supported by the administration of former president Donald Trump.

But after President Joe Biden took office, the Justice Department introduces statements from an economist who predicted that because of reduced competition, consumers would spend an additional $700 million per year.

Later in 2021, the Justice Department, along with six states and the District of Columbia, sued to end the merger.

"It is a very important case to us, because of those families that need to travel and want affordable tickets and good service," Justice Department lawyer Bill Jones said.

American is the largest US airline and JetBlue is the sixth-largest.

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