Breaking up is a difficult thing to do. But for JetBlue and American Airlines, there’s not much choice.
A federal judge ruled against the Northeastern Alliance between American Airlines and JetBlue on Friday, ending an antitrust lawsuit that dragged on for more than a year after the Justice Department alleges the partnership has falsified. stifle competition.
As part of the decision, the judge ruled that the alliance between the two carriers must end within 30 days of Friday. It is unclear how the decision will be made or what it will mean for frequent flyers.
“NEA [Northeast Alliance], which operates as designed and intended by American and JetBlue, significantly reducing competition in the domestic market for air travel. It does so by combining the Boston and New York operations of two airlines that are among the most important competitors in that region,” read Friday’s ruling by Judge Leo T. Sorokin penned.
In the lawsuit, the Justice Department alleges that by share code and collaborate to run additional routing networks through New York and Boston, the alliance will “eliminate significant competition between American and JetBlue resulting in lower fares and higher quality service for consumers traveling to and from those airports.”
However, American and JetBlue have aggressively defended the pact, which airlines say allows them to compete more strongly with Delta Air Lines and United Airlines – which dominate the Northeast market – than either airline can do it alone. While JetBlue has a strong presence in the Northeast, it is still relatively small and less present elsewhere in the country.
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Although American Airlines is still large, its presence in New York has decreased significantly since the early 2000s and it has not been able to significantly add service due to location constraints in New York.
During a three-week trial in US District Court in Boston, Sorokin heard testimony from current and former executives from both airlines, as well as competitors, along with industry experts and economists.
The airlines’ defense centered on the argument that in the 18 months since the union began, the cost increases that the DOJ warned of in the original complaint had not materialized. The airlines said they have increased capacity in the Northeast and “improved the quality of travel to and from Boston and New York” through “cooperative schedules, code sharing and integrated frequent flyer program.”
What does this mean for the American Airlines and JetBlue partnership?
Although the two airlines did not immediately comment on the news, a federal judge ruled that Northeastern Union must be “permanently joined” 30 days after Friday.
It is possible that the airlines will appeal, but for now, the ruling seems to imply that the partnership will end in the next few weeks.
TPG will post updates as we get them, but if you’ve already booked an upcoming trip with American and/or JetBlue, you may want to start reviewing your options if you’re planning to take advantage. Northeastern Union perks such as redemption and reciprocal mileage options, elite benefits, and club access.
The two carriers also expanded and reconfigured their networks to support the alliance. So, assuming the ruling goes into effect, many changes may need to be cleared up within a month.
Additional reporting Zach Griff. This is a developing story and will be updated.
