The Department of Justice won a lawsuit to undo a partnership between American Airlines and JetBlue Airways in the Northeast region on Friday, claiming the partnership was anti-competitive.
A federal judge sided with the Justice Department in the suit, which was filed in September 2021, claiming the partnership violated the Sherman Act. He also ordered both parties must dissolve the relationship in 30 days.
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“It 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,” U.S. District Judge Leo Sorokin said in his ruling.
He continued, “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. Such a pact is just the sort of ‘unreasonable restraint on trade’ the Sherman Act was designed to prevent.”
The airlines argued that the relationship was necessary in order to compete with airline giants such as United and Delta. Both airlines are expected to try and appeal the decision, but a JetBlue spokeswoman said the airlines were still evaluating their next steps.
“We are disappointed in the decision,” the spokeswoman told CNBC. “We made it clear at trial that the Northeast Alliance has been a huge win for customers. Through the NEA, JetBlue has been able to significantly grow in constrained northeast airports, bringing the airline’s low fares and great service to more routes than would have been possible otherwise.”
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The DOJ filed a different lawsuit in March to block a merger between JetBlue and Spirit Airlines. The antitrust lawsuit claims the merger would increase Spirit’s prices, which is known to be a low-budget airline.
The airlines pushed back against the suit and argued the merger would expand JetBlue’s “unique offering — where customers do not have to choose between a low fare and a great experience.”
