Prior to that, the complaint, which was filed in 2021, assumed that the airline alliance amounted to a merger, which would harm customers by raising prices. The trial began a year later in Boston and wrapped up in December 2022.
Merrick Garland, the U.S. Attorney General, said, “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,” he added in the statement.
Both airlines, though, expressed unhappiness with the choice and said they were reviewing their options.
Leo Sorokin, the U.S. District Judge, said in his ruling that “it makes the two airlines partners, each having a substantial interest in the success of their joint and individual efforts, instead of vigorous, arms-length rivals regularly challenging each other in the marketplace of competition.”
Based in Fort Worth, Texas, American Airlines and New York-based JetBlue Airways contended that the so-called Northeast Alliance was necessary to compete with other large carriers such as Delta Air Lines and United Airlines at the region’s congested airports.
Also, Sorokin wrote that “Whatever the benefits to American and JetBlue of becoming more powerful — in the northeast generally or in their shared rivalry with Delta — such benefits arise from a naked agreement not to compete with one another.”
“Such a pact is just the sort of ‘unreasonable restraint on trade’ the Sherman Act was designed to prevent,” he added in the statement.
He ordered the airlines to end the partnership 30 days after the ruling. The carriers, on the other hand, are likely to challenge the decision.
“The carrier is studying the decision and estimating what comes next,” a JetBlue spokeswoman stated.
“We are disappointed in the decision; we made it clear at trial that the Northeast Alliance has been a huge win for customers. 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,” a JetBlue spokeswoman said in a statement.
Moreover, an American Airlines spokesperson said in a statement that “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, and there is no legal basis for inferring harm simply from the fact of collaboration,” the spokesperson added.
Besides, conquering the partnership would be difficult, especially during the peak summer travel season, for which both airlines have sold tickets prior.
Additionally, under the collaboration, which was initially authorised in 2021 during the closing weeks of the Trump administration and has since been improved, JetBlue and American are not permitted to affiliate fares.
Previously, JetBlue had also warned in a securities filing that a ruling against the NEA “could have an adverse impact on our business, financial condition, and results of operations.
“In addition, we are incurring costs associated with implementing operational and marketing elements of the NEA, which would not be recoverable if we were required to unwind all or a portion of the NEA,” JetBlue’s spokesperson stated.
In March, the department separately filed an antitrust lawsuit to block JetBlue’s proposed possession of budget carrier Spirit Airlines, while arguing the deal would surge fares, “harming cost-conscious fliers most acutely.”
The Biden administration, which has committed to taking a firm line against anti-competitive mergers, is unlikely to approve this combination.
- Published By Team Genuine Reporter