A United States Department of Justice lawsuit against American Airlines (AA, Dallas/Fort Worth) and JetBlue Airways (B6, New York JFK) parent companies American Airlines Group and JetBlue Airways Corp will go ahead, with a judge setting a trial date for September 26.
The government branded the two carriers’ Northeast Alliance partnership - which allows them to sell each other’s flights in their networks in the Boston and New York area and links their frequent flyer schemes - “a de facto merger” when the DOJ and attorney-generals in six states (Arizona, California, the District of Columbia, Florida, Massachusetts, Pennsylvania, and Virginia) sued to block it last September.
The DOJ asked the court to order the airlines to scrap the agreement, which had been inked in 2020 and implemented in January 2021, as it “eliminates competition in New York and Boston and harms air travellers nationwide” with higher airfares. JetBlue and American responded by vowing to continue implementing it, arguing that it was helping not harming consumers.
However, Judge Leo S Sorokin of the US District Court for the District of Massachusetts rejected their motion to dismiss the lawsuit, saying on June 9 that the US government’s complaints were plausible, Bloomberg Law reported.
Related issues that the airlines raised, such as the definition of the New York market and whether the Northeast Alliance would increase competition that would otherwise not be achievable, are best addressed through later proceedings, he advised.
“The complaint alleges - plausibly and in a manner that is neither conclusory nor threadbare - that the alliance at issue between American and JetBlue is likely to harm competition in the relevant markets, and that American and JetBlue control a significant share in an already concentrated market,” Sorokin said.
JetBlue commented in a statement that “we are confident the court will rule in our favour after we present the facts this September,” while American Airlines said it “looks forward to the opportunity to demonstrate the significant consumer benefits and increased competition enabled by the Northeast Alliance.”