The Undoing of American and JetBlue’s Northeast Alliance

25.08.2023 - 13:37 / skift.com / Delta Air Lines / Joanna Geraghty / U.S.District / Edward Russell / Lex Haris

His tone was measured, but Judge Leo T. Sorokin made it clear he wasn’t buying the argument from American and JetBlue that their “Northeast Alliance” promoted competition and was good for flyers.

Instead, in a 94-page ruling Friday afternoon, Sorokin laid out the history of the so-called NEA in which the two airlines share revenue and coordinate schedules and other practices in servicing New York and Boston. Sorokin said it harms consumers by effectively removing one competitor from the market.

In short, Sorokin wrote: “Through the NEA, American and JetBlue cease to compete and, instead, operate as a single carrier in the northeast. That is the core of the relationship, and it is a naked assault on competition.”

The U.S. Department of Justice sued to block the American Airlines-JetBlue Northeast Alliance in September 2021. On Friday, U.S. District Court Judge Sorokin said the partnership “substantially diminishes competition in the domestic market for air travel,” and ruled that the two airlines must unravel the partnership. An appeal is possible.

Both American and JetBlue pushed back on the decision. American said, according to Reuters, “The court’s legal analysis is plainly incorrect and unprecedented for a joint venture.” It added that the alliance “has been a huge win for customers and anything but anticompetitive.” JetBlue said the “Northeast Alliance has been a huge win for customers” by extending the airline’s low fares “to more routes than would have been possible otherwise.”

At a Skift event last November – before the the start of the trial – JetBlue President Joanna Geraghty defended the alliance to Edward Russell, Skift’s Transport editor and reporter: “If you look at the Northeast Alliance, Delta has doubled down in Boston. United has added a lot of capacity into Newark. And that’s all in response to what JetBlue and American are doing in the northeast. If that’s not a competitive response from legacy carriers that will drive competition and drive fares in a positive way, I don’t know what is.”

Here’s more background directly quoted from the court’s ruling:

Last fall, JetBlue’s President sat down with Airline Weekly Editor Ned Russell, when asked about the Northeast Alliance and the DOJ action, she told him “We’re confident that we will prevail.” Watch the video in full, below.