What’s next for American and JetBlue after court rejects alliance

The controversial northeast alliance between American Airlines and JetBlue Airways, dubbed a “pseudo-merger” by some, is no more. Well, in 30 days time and pending a possible appeal. US Court for the District of Massachusetts Judge Leo Sorokin gave the US Justice Department a big win Friday and ordered the airlines to unwind their alliance, known as the NEA, within a month. He found that American and JetBlue, by entering into what is essentially a domestic joint venture, hurt consumers and eliminated competition from the Boston and New York markets. “A hallmark of a free market is the incentive to fight for revenue and customers against one’s direct competitors,” Sorokin wrote. “As between American and JetBlue, that incentive is eliminated by the NEA.” Attorney General Merrick Garland called the ruling “a win for Americans who rely on competition between airlines to travel affordably.” An American spokesperson called the ruling “incorrect,” and described the alliance as “anything but anticompetitive.” And a JetBlue spokesperson said they were “disappointed” in the decision. American and JetBlue unveiled their alliance in July 2020 amid the depths of the Covid-19 pandemic. The unprecedented pact for two U.S. domestic carriers allowed them to coordinate schedules and share revenues in Boston and New York where they both committed to grow. JetBlue essentially became a shorter-haul feeder for American in those markets, while the latter expanded its international longhaul footprint in both cities. The alliance was approved with few conditions in the waning days of the Trump administration in January 2021. The DOJ, under the Biden administration, nearly immediately took a new look at the pact and sued to block it that September. “By aligning its interests with [American], JetBlue has sacrificed a degree of its independence and weakened its status as an important ‘maverick’ competitor in the industry,” Sorokin wrote in his decision.<br/>