The End of American Airlines-JetBlue's Northeast Alliance

DALLAS — On Friday, a federal judge ruled against the Northeast Alliance (NEA), a partnership between American Airlines (AA) and JetBlue (B6) that had been accused of stifling competition by the Department of Justice (DOJ).

To the surprise of many, the judge ruled that the alliance must end within 30 days from today, May 19. How the decision will be implemented or what it will mean for frequent flyers remains to be seen.

Judge Leo T. Sorokin's decision states that "The NEA, operating as it was designed and intended by American and JetBlue, substantially diminishes competition in the domestic market for air travel. It does so by combining the Boston and New York operations of two airlines that are among the most significant competitors in that region."

The DOJ claimed in the suit that by codesharing and collaborating to run complementary route networks through the aforementioned cities, the alliance would "eliminate significant competition between American and JetBlue that has led to lower fares and higher quality service for consumers traveling to and from those airports."

Just six months ago, B6's Dave Fintzen, Vice President NEA, felt confident that as the airlines continued to enhance their alliance and link more destinations with new nonstop choices, customers would "finally have a compelling alternative” to the carriers that had dominated the Northeast market “for too long.”

However, AA and B6’s claim that the NEA allowed them to compete more effectively against Delta Air Lines (DL) and United Airlines (UA) didn't hold water for the federal judge, who ruled in favor of the DOJ.

The Northeast Alliance

Created in 2020, the NEA was formed to bring competition to the Northeastern market.

Last December, AA, and B6 announced a significant expansion from New York's LaGuardia Airport (LGA).

At the time, the airlines attributed the success of the new routes to the NEA, which had already allowed the carriers to introduce over 50 new routes out of the Northeast's four biggest airports: New York's JFK, LGA, Newark (EWR), and Boston (BOS).

In its three-year run, the alliance spread the increased frequencies across more than 130 routes, allowing for the establishment of 17 international routes.

Today's ruling is a reminder that less competition can still mean higher prices for consumers, or simply less pressure to provide high-quality offerings if there are fewer alternatives available, regardless of whether the partnership in question increased the capacity and quality of air travel in the Northeast region.

It is unclear if AA and B6 will have the chance to appeal the decision –the NEA website states that the partnership is not exempt from antitrust laws designed to protect competition.

It is also unclear if the decision will have some bearing on the JetBlue-Spirit (NK) merger.

This is a developing story.

Featured image: American Airlines and JetBlue aircraft sit behind a United Airlines plane at Boston Logan International Airport (BOS). Photo: Darryl Sarno/Airways

https://airwaysmag.com/us-doj-korean-air-asiana-merger/