Saturday, November 9, 2024 This U.S. appeals court decision against the American Airlines and JetBlue Airways’ Northeast Alliance reflects a significant shift in federal antitrust enforcement in the airline industry, emphasizing the priority of consumer protection over corporate alliances.
The 1st U.S. Circuit Court of Appeals in Boston confirmed that this alliance violated antitrust laws, backing the DOJ’s stance that partnerships should not stifle competition.
Attorney General Merrick Garland praised the ruling as a “victory for millions of Americans,” citing its role in maintaining competitive pricing and service options for travelers. The Northeast Alliance, launched in July 2020, allowed American Airlines and JetBlue to coordinate flights and pool revenue for routes in and out of New York City and Boston. The alliance was initially approved by the Trump administration’s Transportation Department in January 2021.
However, the Biden administration, known for its stricter approach to antitrust matters, took a different stance, with the DOJ suing to block the alliance in September 2021. The DOJ argued that such partnerships reduce price competition, with American losing the incentive to compete aggressively against JetBlue, which has traditionally positioned itself as a more affordable option for consumers. The appeals court’s decision essentially discourages similar partnerships in the future, particularly those that might curb competition in major markets.
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