U.S. Appeals Court Upholds Ruling Against American Airlines and JetBlue Alliance

By Nate Raymond and David Shepardson

(Reuters) – A U.S. appeals court affirmed that American Airlines' now-scrapped Northeast partnership with JetBlue Airways violated federal antitrust law.

Siding with the U.S. Department of Justice, the Boston-based 1st Circuit Court of Appeals upheld a trial judge's decision to block the airlines' "Northeast Alliance," which allowed them to coordinate flights and pool revenue.

U.S. Circuit Judge William Kayatta noted that the arrangement resembled an agreement between two powerful competitors sharing revenues and dividing concentrated markets. The judge, Leo Sorokin, had issued a ruling in May 2023 with findings unfavorable to American Airlines.

The alliance, announced in July 2020, was approved by the U.S. Transportation Department just before Donald Trump’s first administration ended in January 2021. The Biden administration, through the Justice Department, sued to block the partnership in September 2021.

Through the partnership, American Airlines and JetBlue coordinated schedules and pooled revenue for flights to and from New York City and Boston. After the ruling, JetBlue terminated the alliance while trying to gain approval for its $3.8 billion acquisition of Spirit Airlines, which is also challenged by the Justice Department.

Despite the ruling, American Airlines will appeal, concerned that the verdict restricts future collaboration opportunities, including with JetBlue.