American Airlines is petitioning the U.S. Supreme Court to overturn a lower court’s decision that deemed its former partnership with JetBlue Airways in the Northeast U.S. a violation of federal antitrust law. The alliance, which allowed the airlines to coordinate schedules and share revenue, was dissolved following the ruling.
This appeal comes after the 1st U.S. Circuit Court of Appeals in Boston upheld a trial judge’s decision blocking the “Northeast Alliance” in November. American Airlines contends that the partnership fostered competition among airlines in the Northeast market and that the lower court’s ruling could negatively impact future collaborative efforts across various industries.
The original lawsuit against the alliance was filed in 2021 by the U.S. Department of Justice and six states under the Biden administration. The Justice Department argued that the collaboration would ultimately harm consumers by reducing price competition between American and JetBlue, traditionally a lower-cost competitor.
American Airlines maintains that the alliance, operational from July 2020 until its termination, benefited consumers by expanding travel options in the Northeast. The partnership was initially approved by the U.S. Transportation Department in the final days of the Trump administration.
The alliance allowed American, the largest U.S. airline, and JetBlue, the sixth-largest, to coordinate flights and share revenue for routes in and out of New York City and Boston. This cooperation, according to the Justice Department, eliminated incentives for American to compete with JetBlue on price, potentially leading to higher fares for travelers.
In May 2023, U.S. District Judge Leo Sorokin ruled in favor of the Justice Department, concluding that the alliance violated antitrust law. JetBlue subsequently ended the partnership and abandoned its $3.8 billion bid to acquire Spirit Airlines, a move also challenged by the Justice Department.
Despite the alliance’s termination, American Airlines is pursuing the appeal, arguing that the lower court’s decision could prevent the company from entering into similar partnerships in the future, including potential collaborations with JetBlue. The Supreme Court’s decision in this case could have significant implications for future airline alliances and industry collaborations.
In conclusion, American Airlines is seeking a reversal from the Supreme Court, arguing that the Northeast Alliance enhanced market competition and that the lower court’s ruling sets a detrimental precedent for future cooperative ventures. The outcome of this appeal holds substantial weight for the airline industry and its ability to form strategic partnerships.
