Yahoo Autos American Airlines And JetBlue Ordered By Federal Court To End Northeast Alliance
Most passengers would probably admit they already feel like they are being held hostage by airlines when they’re sitting in a cramped economy-class seat. In recent years, commercial aviation seems headed in a direction where passengers could be held hostage buying tickets. The Associated Press reports a federal judge has ruled that American Airlines and JetBlue must end their Northeast Alliance on anti-competition grounds.
The Northeast Alliance is a partnership between American and JetBlue at four airports in the northeastern United States: John F. Kennedy, LaGuardia and Newark in the New York metropolitan area, and Boston’s Logan Airport. The carriers are two of the four largest airlines in the region. Since 2021, the alliance has involved coordinating schedules, facilitating airport slot swaps, and sharing revenues.
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U.S. District Judge Leo Sorokin sided with the Justice Department in the case for several reasons. The Northeast Alliance decreased flight frequency and carrier choice for passengers at the four airports. The partnership’s revenue-sharing model also removed any incentive for American Airlines and JetBlue to compete against each other in the Northeast. The alliance’s primary aim was also to strengthen each’s airlines position against Delta Air Lines.
Judge Sorokin wrote in his decision:
“[The Northeast 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.”
Both JetBlue and American Airlines have stated that they disagree with the decision and considering an appeal. JetBlue is currently involved in another anti-competition lawsuit considering its $3.8 billion purchase of Spirit Airlines.
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