American and JetBlue Granted Extension to Gradually Dissolve North East Alliance

American Airlines and JetBlue have been granted more time to unwind their North East Alliance (NEA) by a federal judge who ruled that they violated antitrust laws. The judge said he would set a new date for them to terminate their partnership later than June 20, 2023.

Judge Leo Sorokin of the US District Court for the District of Massachusetts said he needed more time to issue a final judgment and permanent injunction after reviewing the filings from both sides. He said there were “meaningful disputes” over the terms of the injunction.

The US Department of Justice (DOJ), which sued American Airlines and JetBlue over their alliance last year, urged Sorokin to end their partnership as soon as possible. The DOJ argued that allowing parts of their alliance to continue indefinitely would provide incomplete relief and harm consumers.

The DOJ said that American Airlines and JetBlue should not only stop coordinating their flights and fares in certain markets under their NEA but also invalidate their codeshare agreement, frequent flyer agreements and bilateral special prorate agreement. These are separate arrangements that allow them to share flights, customers and revenue.

American Airlines and JetBlue opposed this proposal and said it was “drastically overreaching”. They said that these agreements were not part of their NEA and did not violate antitrust laws. They also said that terminating them would cause unnecessary disruption and inconvenience to travelers.

American Airlines and JetBlue launched their NEA in February last year to offer more choices and lower fares in certain markets in New York and Boston. They claimed that their alliance would benefit consumers and increase competition against Delta Air Lines.

However, Sorokin ruled on May 19, 2023, that their alliance was anticompetitive and illegal under the Sherman Act. The Sherman Act is a law that aims to preserve free and fair competition in trade and commerce. The judge ordered them to dissolve their NEA within 30 days.