Global Courant 2023-05-20 03:31:39
An American Airlines plane takes off near a parked JetBlue aircraft at Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida, on July 16, 2020.
Joe Raedle | Getty Images
A federal judge ordered that on Friday US airlines And JetBlue Airways to end their partnership in the Northeast, a victory for the Justice Department after it filed a lawsuit to overturn the alliance, arguing it was anti-competitive.
The lawsuit, filed in September 2021, alleged that the airline alliance was in fact a merger that would harm consumers by driving up fares. The trial began in Boston a year later and ended in December.
Both airlines expressed their disappointment with the decision and said they were considering next steps.
“It makes the two airlines partners, each of whom has a substantial interest in the success of their joint and individual endeavors, rather than powerful, arms-length rivals who regularly challenge each other in the competitive marketplace,” said U.S. District Judge Leo Sorokin in his ruling. pronunciation.
American Airlines of Fort Worth, Texas and JetBlue Airways of New York argued that they needed the so-called Northeast Alliance to better compete with other major carriers Delta Air Lines and United Airlines at congested airports in the region.
“Whatever the benefits for American and JetBlue in becoming more powerful — in the Northeast at large or in their shared rivalry with Delta — such benefits come from a naked agreement not to compete with each other,” Sorokin wrote. “Such a pact is exactly the kind of ‘unreasonable restriction on trade’ that the Sherman Act was intended to prevent.”
He ordered the airlines to terminate the partnership 30 days after the ruling. The carriers are likely to challenge the decision. A spokeswoman for JetBlue said the airline is studying the decision and evaluating next steps.
“We are disappointed with the decision,” said the spokesman. “During the process, we made it clear that the Northeast Alliance has been a huge win for customers. The NEA has allowed JetBlue to grow significantly in tight airports in the Northeast, extending the airline’s low fares and great service to more routes. charged than would have been otherwise possible.”
“The Court’s legal analysis is grossly flawed and unprecedented for a joint venture like the Northeast Alliance,” an American Airlines spokesperson said in a statement. “There was no evidence on file of any consumer harm from the partnership, and there is no legal basis for inferring harm simply from the fact of collaboration.”
Undoing the partnership would be difficult, especially during the peak summer season, for which airlines have already sold tickets.
JetBlue and American are not allowed to coordinate tariffs under the partnership, which was approved in the final days of the Trump administration in 2021 and has since extensive.
JetBlue previously warned in a securities filing filing a ruling against the NEA “could adversely affect our business, financial condition and results of operations.
“Additionally, we incur costs associated with the implementation of operational and marketing elements of the NEA, which cannot be recovered if we were to wind down all or part of the NEA,” the company said.
The Justice Department did not immediately respond to a request for comment.
The department filed a separate filing in March antitrust lawsuit to block JetBlue’s proposed budget airline takeover Spirit airlinesarguing that the deal would drive up fares, “which would most acutely hurt cost-conscious fliers”.
That combination represents a major hurdle to approval by the Biden administration, which has vowed to crack down on what it considers anti-competitive deals.
