American and JetBlue await US antitrust decision with implications for Spirit Takeover

A US judge could any day rule in the Department of Justice’s antitrust suit against American Airlines and JetBlue Airways’ alliance in Boston and New York, with their decision having potential big implications for JetBlue’s proposed takeover of Spirit Airlines. Arguments in the case ended in November with federal judge Leo Sorokin saying at the time that he needed some time to review the evidence before issuing a ruling. The Justice Department claimed that the airlines’ alliance is anti-competitive and hurts consumers, while American and JetBlue defended the pact saying it allowed them to add more flights and increase competition to the benefit of consumers. Jamie Baker, an airline analyst at J.P. Morgan, wrote Thursday that he expects Sorokin’s decision by the end of January. A ruling in favor of American and JetBlue — or, allowing them to maintain their alliance as is — being the “most probable outcome,” he said. Baker was “not impressed” by the government’s arguments that, among other things, claimed consumers would pay $500-700 million in higher airfares as a result of the pact. “The NEA stimulates competition in affected geographies and potentially siphons share away from competitors … which sounds to us like a laudable outcome for US consumers,” wrote Baker. The NEA refers to American and JetBlue’s name for their pact, the Northeast Alliance.<br/>