The Justice Department has won a lawsuit to undo American Airlines‘ partnership with JetBlue Airways that allowed them coordinate routes and schedules in the Northeast U.S.
The lawsuit, filed in September 2021, alleged that the airlines’ alliance was effectively a merger that would hurt consumers by driving up fares. The trial began a year later in Boston and wrapped up in December.
Fort Worth, Texas-based American Airlines and New York-based JetBlue Airways argued they needed the so-called Northeast Alliance to better compete with other large carriers Delta Air Lines and United Airlines in congested airports in the region.
JetBlue and American are not allowed to coordinate fares under the partnership, which was approved in the final days of the Trump administration in 2021 and has since expanded.
JetBlue had previously warned in a securities filing that a ruling against the NEA “could have an adverse impact on our business, financial condition, and results of operations.
“Additionally, we are incurring costs associated with implementing operational and marketing elements of the NEA, which would not be recoverable if we were required to unwind all or a portion of the NEA,” the company said.
The airlines didn’t immediately comment on the ruling Friday.
Separately, on March 7, the Justice Department filed an antitrust lawsuit to block JetBlue’s plan to acquire budget carrier Spirit Airlines, arguing the deal would drive up fares, “harming cost-conscious fliers most acutely.”
The combination faced a high hurdle for approval by the Biden administration, which has vowed to take a hard line against what it views as anticompetitive deals.
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