Dow Jones Newswires May 19, 2023 04:41:00 PM ET
|Judge Rejects Partnership Between American Airlines and JetBlue -- Update|
A federal judge ruled in favor of the Justice Department's effort to unwind a partnership between American Airlines and JetBlue, finding that their arrangement suppressed competition in key northeast markets.
American and JetBlue formed their Northeast Alliance in 2020, agreeing to work together across three New York-area airports and Boston. The Justice Department, along with six states and the District of Columbia, in 2021 filed an antitrust suit seeking to unwind the alliance, alleging it has eroded competition and will push up airfares for fliers. A trial was held in federal court in Boston last year.
U.S. District Judge Leo Sorokin on Friday ruled against the companies, finding that the arrangement transformed once fierce rivals into collaborators. He barred the airlines from continuing the partnership.
The partnership "has eliminated the once vigorous competition between two of the four largest domestic carriers in the northeast, replacing it with broad cooperation in pursuit of the shared interests of their partnership," the judge wrote.
The court ruling is a boost to the Biden administration's more aggressive approach to antitrust enforcement, which has suffered a series of setbacks in other recent cases.
JetBlue and American had argued that they needed to join forces to effectively challenge rivals in New York and Boston. Sorokin said the argument was unconvincing.
Neither airline responded to requests for comment. The Justice Department didn't immediately respond to a request for comment.
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