American Airlines Seeks Supreme Court Review Over NEA
American Airlines (AA, Dallas/Fort Worth) has taken its Northeast Alliance (NEA) joint venture with JetBlue Airways (B6, New York JFK) to the highest court in the land. The carrier has filed a request with the Supreme Court of the United States to review and overturn a First Circuit decision that blocked the alliance. American Airlines contends that the lower court misjudged the impact of the joint venture, arguing that there is no marketwide evidence that the partnership harms consumers. The carrier is urging the Supreme Court to clarify how joint ventures should be evaluated under the rule of reason in antitrust cases.
The NEA alliance, announced in July 2020 and approved by the US Department of Transportation (DOT) in January 2021 during the Trump administration, was designed to allow American Airlines and JetBlue Airways to work together on flight schedules, routes, and resource sharing in the northeastern United States. The agreement was particularly aimed at optimizing operations at major hubs like New York JFK and Boston. Under this joint venture, the two carriers would have coordinated efforts to improve connectivity and operational efficiency while sharing revenue from combined services.
However, under President Joe Biden, the United States Department of Justice (DOJ) took a different stance on the partnership. The DOJ argued that the alliance would harm consumers by reducing the incentive for American Airlines to lower prices to attract customers from JetBlue. Essentially, the DOJ contended that the two airlines, by acting as partners rather than competitors, could manipulate market conditions to the detriment of travelers. This view ultimately led to a legal challenge against the NEA joint venture.
In 2023, US District Judge Leo Sorokin sided with the DOJ, ruling that the alliance violated antitrust law. The ruling was based on the idea that the joint venture could create an environment where competition was stifled in key markets, thereby driving up fares. In the wake of the decision, JetBlue terminated the alliance in an effort to bolster its chances of securing approval for its proposed acquisition of Spirit Airlines—a deal that had also faced scrutiny from the DOJ. The ruling further imposed a ten-year ban on any similar alliances between the two carriers, effectively closing the door on future collaborations of this kind.
American Airlines now seeks to reverse this decision through the Supreme Court, arguing that the First Circuit’s ruling fails to consider comprehensive market data that would indicate consumer harm. A spokesperson for the carrier stated that they believe the joint venture, when properly evaluated, demonstrates benefits that include enhanced network connectivity and potentially lower fares for passengers. American Airlines insists that the decision to block the NEA joint venture was based on a misinterpretation of antitrust laws and that a reexamination by the Supreme Court would set a clearer standard for evaluating such partnerships in the future.
While JetBlue was not immediately available for comment, its recent discussions with multiple airlines regarding potential new partnerships suggest that the landscape for airline alliances may evolve further in the coming years. As the legal battle continues, the outcome of American Airlines’ appeal to the Supreme Court could have far-reaching implications for the aviation industry, shaping how joint ventures and collaborative agreements are structured and scrutinized in the future.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com