Supreme Court rejects American Air appeal on dismantled JetBlue alliance

The U.S. Supreme Court refused to hear American Airlines Group Inc.’s appeal of a lower court ruling that its partnership with JetBlue Airways Corp. violated federal antitrust laws by eliminating competition between the carriers and limiting travelers’ choices for flights.

American turned to the Supreme Court after the 1st US Circuit Court of Appeals in November upheld a district judge’s ruling that the partnership violated federal antitrust laws. The airlines maintained that their Northeast Alliance, focused on Boston and New York, benefited consumers and allowed them to compete more effectively against United Airlines Holdings Inc. and Delta Air Lines Inc.

In urging the court to reject the appeal, the Justice Department said the practical implications of the case were likely to be limited. JetBlue pulled out of the deal two years ago, so a ruling in American’s favor wouldn’t have meant the accord was back in force. The Justice Department also said it still would have been able to press other arguments for blocking the agreement in the lower courts.

American countered that reversing the appeals court ruling would free the airline – and other companies – to enter into similar partnerships in the future. The carrier said Monday it was disappointed in the court’s decision.

“The Northeast Alliance was designed to increase competition and expand customer options in the northeast, which it clearly did during the time it was allowed to operate,” according to a statement from American.

American opted to pursue an appeal on its own a year ago, arguing the original 2023 decision to invalidate the Northeast Alliance was based on a legal misunderstanding of how antitrust laws operate. Eliminating JetBlue as a rival in the northeast U.S. was not anti-competitive on its own, the carrier argued, and would have to be tied to consumer harm through higher prices or reduced flying options.

The Northeast Alliance allowed the carriers to share routes, bookings and passengers on flights primarily from New York’s John F. Kennedy International and LaGuardia airports, Liberty International Airport in Newark, New Jersey, and Boston’s Logan International Airport. It offered reciprocal loyalty program benefits and passengers were able to use either company’s website to purchase a single itinerary that included flights on both airlines.

American also argued that an injunction entered by US District Judge Leo Sorokin would prevent the carrier from entering into other airline partnerships for 10 years. Sorokin ordered the Northeast Alliance dismantled after his antitrust ruling.

The Justice Department challenge of the alliance was the first after President Joe Biden called out the industry in 2021 as among those where consolidation had reduced competition, harming consumers. A separate Justice Department challenge also derailed JetBlue’s planned $3.8 billion acquisition of Spirit Airlines last year.

American and JetBlue discussed reviving an updated version of their alliance earlier this year before American ended the talks in April, saying the carriers couldn’t agree on terms that made sense operationally or financially. JetBlue announced a new partnership with United a month later.

The case is American Airlines Group v. United States, 24-938.

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