An American Airlines plane takes off near a parked JetBlue aircraft at Fort Lauderdale-Hollywood International Airport on July 16, 2020 in Fort Lauderdale, Florida.
Joe Raedle | Getty Images
The Department of Justice won a lawsuit to overturn American airlinespartnership with Jet Blue Airways which allowed carriers to coordinate routes and schedules in the northeastern United States
A federal judge ruled on Friday that the airlines’ partnership violated antitrust law.
The trial, filed in September 2021, alleged that the airline alliance was actually a merger that would hurt consumers by driving up fares. The trial began a year later in Boston and ended in December.
American Airlines, based in Fort Worth, Texas, and JetBlue Airways, based in New York, have argued that they need the so-called Northeast Alliance to better compete with other major carriers. Delta Airlines And United Airlines at congested airports in the region.
“Whatever the benefits to American and JetBlue from becoming more powerful — in the Northeast generally or in their shared rivalry with Delta — those benefits come from a bare bones agreement not to compete with each other,” Judge wrote. Leo Sorokin in his decision. “Such a pact is exactly the kind of ‘unreasonable restriction of trade’ that the Sherman Act was meant to prevent.”
He ordered the airlines to end the partnership 30 days after the decision. Carriers are likely to challenge the decision. The airlines did not immediately comment.
It would be difficult to break the partnership, especially during the peak summer travel season, for which airlines have already sold tickets.
JetBlue and American aren’t allowed to coordinate fares under the partnership, which was approved in the final days of the Trump administration in 2021 and has since extended.
JetBlue previously warned in a securities filing that a ruling against the NEA “could adversely impact our business, financial condition and results of operations.
“In addition, we incur costs associated with implementing operational and marketing elements of the NEA, which would not be recoverable if we were to unwind all or part of the NEA,” the company said.
The Justice Department did not immediately respond to a request for comment.
The department filed separately in March a antitrust lawsuit to block JetBlue’s proposed acquisition of a low-cost carrier Spirit Airlinesarguing that the deal would drive up fares, “harming cost-conscious travelers the most.”
The combination faced a steep hurdle to be approved by the Biden administration, which has pledged to take a hard line against what it sees as anti-competitive deals.
This is breaking news. Please come back for news.
[colabot2]
Source link