A federal judge has ruled that American Airlines and JetBlue must end their Northeast Alliance because it is anti-competitive.
Formed in 2021, the partnership allows the two carriers to coordinate schedules, swap slots and share revenues at JFK, LaGuardia and Newark Airports in the New York metropolitan area, and Logan Airport in Boston.
U.S. District Judge Leo Sorokin ruled in favor of the Justice Department, which had brought the suit in partnership with six states. Combining two of the four largest US airlines, the Northeast Alliance has decreased the number of flights at the four airports, and violates the Sherman Antitrust Act.
The Alliance “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. Though the defendants claim their bigger-is-better collaboration will benefit the flying public, they produced minimal objectively credible proof to support that claim. 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,” Judge Sorokin wrote in his decision.
The Boston Globe called the ruling “a major victory for the Biden administration, which has used aggressive enforcement of antitrust laws to fight against mergers and other arrangements between large corporations,” noting that an economist predicted it would cost consumers more than $700 million a year extra if American and JetBlue stopped competing in the Northeast.