American Airlines and JetBlue Ordered To Cease Partnership in the Northeast U.S. By Justice Department The Justice Department sued to stop the Northeast Alliance, claiming it increased airfare and reduced options in domestic markets.
American Airlines and JetBlue must break their Northeast Alliance partnership., U.S. District Judge Leo Sorokin ruled in Boston on Friday.
The ruling comes five months after a multi-week trial that began in September 2022 and concluded in December. The Justice Department originally sued the airlines in September 2021 to block the partnership, stating that it increased airfare and caused a reduction in choices for Americans in several domestic markets.
"Today's decision is a win for Americans who rely on competition between airlines to travel affordably," said attorney general Merrick B. Garland in a statement. "The Justice Department will continue to protect competition and enforce our antitrust laws in the heavily consolidated airline industry and across every industry."
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Sorokin ruled that the airlines have 30 days to cease their partnership.
"We believe the decision is wrong and are considering next steps," American Airlines told Entrepreneur. "The Court's legal analysis is plainly incorrect and unprecedented for a joint venture like the Northeast Alliance."
JetBlue said it is "disappointed in the decision" in a statement to Entrepreneur and added that the company is "studying the judgment in full and evaluating our next steps as part of the legal process."
What is the Northeast Alliance?
The Northeast Alliance launched in early 2021 and combines JetBlue and American Airlines operations at four major airports (Boston Logan, John F. Kennedy, LaGuardia, and Newark Liberty) through codesharing (offering seats on each other's flights) and slot swaps (pooling their gates as well as takeoff and landing times).
The partnership was intended to offer more options for flyers in the Northeast through broader schedules and expanded perks to consumers such as frequent flyer reciprocity and loyalty benefits that can be used between the two carriers, according to the airlines.
However, according to the original complaint, the Justice Department claimed it would cause "hundreds of millions of dollars in harm" to American travelers and that fair competition is "essential" for consumers to travel "affordably and safely."
The complaint also stated that one aspect of the partnership (where the two airlines traded information such as flight schedules, routes, and which planes to use for each flight) was an "unprecedented combination" and would cause an uptick in prices and a decline in options.