A Federal District Court has ruled that the Northeast Alliance between American Airlines and JetBlue is illegal under anti-trust laws, stifles competition and harms consumers.
The two airlines have indicated they will appeal the decision, saying that the suit failed to prove that any actual consumer harm had taken place and that the court had incorrectly substituted ‘common sense’ for evidence in making its decision.
The appeal is likely to be filed next week, with a request to stay the order by Judge Leo Sorokin in Boston, since the ruling ordered that the nearly three-year-old joint venture must be unwound within 30 days.
The alliance agreement allows the two airlines to coordinate flights, routes and some revenue on flights centered on the northeastern U.S., where Delta and United are the dominant carriers. JetBlue and American have argued that rather than reducing competition their alliance creates a strong competitor to the other two. It also helps JetBlue and American offer more routings by allowing itineraries that feed transfer passengers to each other.
Complicating the issue is another controversial combination; JetBlue is in the process of acquiring Spirit Airlines, but also faces opposition there from government regulators who say it is an anti-competitive merger, although JetBlue claims it will create a stronger alternative to the Big Four legacy carriers.
