American Airlines, JetBlue’s Partnership in Jeopardy After Court Orders Nullification of Agreement

American Airlines and JetBlue have been ordered to end their partnership agreement as the court said it is violating anti-trust laws. The judge in the case apparently sided with the Department of Justice that filed the lawsuit to break the deal between the two companies.

CNN Business reported that the Justice Department filed went to court in 2021 to complain about American Airlines and JetBlue’s partnership. The DOJ said the companies’ deal caused prices to go up and lessened the options for passengers traveling to and from major cities in the Northeast like Boston and New York City.

Moreover, the Justice Department stated in the lawsuit that the airlines committed to exchanging information on which routes to fly, when to fly them, who would fly them, and what size of airplanes to use for every flight. It was noted that the cooperation started in 2020.

U.S. District Judge Leo Sorokin said American Airlines and JetBlue Airways need to discontinue their alliance on the Northeast U.S. flight routes. The judge explained that the two airlines are “formidable and influential players” in the air travel industry since the former is the world’s biggest airline while the latter ranks sixth in the U.S. list of largest airlines.

Judge Sorokin further said that the companies’ schedule optimization and coordination caused a decrease in capacity, lower frequencies, or diminished the choices of the flyers on multiple routes. The judge added the alliance effectively eliminated an entire competitor from the markets and left customers with very few options for trips in Northeast routes in the U.S.

“It is abundantly clear to the Court that the defendants’ primary motivation in establishing the NEA was to strengthen their own competitive positions against Delta and, to a lesser extent, United in Boston and New York,” the judge said in his ruling.

CNBC also quoted U.S. Attorney General Merrick Garland as saying in response to the verdict, “Today’s decision is a win for Americans who rely on competition between airlines to travel affordably. The Justice Department will continue to protect competition and enforce our anti-trust laws in the heavily consolidated airline industry and across every industry.“

Meanwhile, America Airlines and JetBlue Airways were given 30 days to scrap their partnership.

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