The DOJ and state attorneys general previously argued that the partnership would seriously impact consumer choice and airline pricing.
American Airlines has asked the U.S. Supreme Court to reverse a lower court’s decision that prevented it from continuing a marketing partnership with JetBlue Airways.
The carrier filed a writ of certiorari for the nation’s highest court to review the case following an unsuccessful appeal in federal court on the ruling last November. In the nearly 200-page petition, American outlines its position that the original ruling’s analysis didn’t correctly apply antitrust laws to fit the situation.
The two airlines were already in the process of implementing their Northeast Alliance, which would have allowed them to coordinate and jointly market flights and pool revenue. The Department of Justice (DOJ) during the Biden administration, along with the attorneys general of Arizona, California, Florida, Massachusetts, Pennsylvania, Virginia, and the District of Columbia sued to block the arrangement, saying it would harm travelers by reducing competition in the northeast, and remove incentives for JetBlue and American to compete with each other for passengers in the region.
At the time, the DOJ and state attorneys general argued that the partnership amounted to a de facto merger which would seriously impact consumer choice and airline pricing at airports serving New York, Newark, and Boston. Such an agreement, they said, violated the Sherman Act, a century-old federal law that prohibits unfair monopolies.
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U.S. District Court Judge Leo Sorokin agreed with the DOJ in the Spring of 2023 and gave the airlines 30 days to unwind their agreement.
“Whatever the benefits to American and JetBlue of becoming more powerful — in the northeast generally or in their shared rivalry with Delta — such benefits arise from a naked agreement not to compete with one another,” Sorokin wrote. “Such a pact is just the sort of ‘unreasonable restraint on trade’ the Sherman Act was designed to prevent,” he wrote.
Calling it a “clear legal error,” American takes aim at Sorokin’s analysis that the Northeast Alliance would be harmful to consumers as false. American claims that in the 20 months the Northeast Alliance was in effect before the case was brought to trial, passenger output at the airports in question increased, but without higher fares. The error, American argues, was that the judge focused too closely on certain reductions in service between American and JetBlue, instead of comparing the total amount of service among all carriers in the market.
The DOJ and Federal Trade Commission (FTC) recently alerted employees in an internal memo that the departments will continue tighter scrutiny of corporate mergers and acquisitions that began during the Biden administration. The departments have joint responsibility in overseeing the enforcement of the Sherman Act and other antitrust regulations. Still, it’s unclear if there has been a shift in perspective on the Northeast Alliance, which is a joint venture, rather than a merger. In its request to the Supreme Court, American claims the original ruling also disregards historical precedents in how joint ventures have been viewed in relation to antitrust regulations.
Neither JetBlue nor the DOJ had issued reactions to American’s Supreme Court filing as of Wednesday.
The Supreme Court receives more than 7,000 requests to review cases each year but typically agrees to hear 100-150 of them. The DOJ, State Attorneys General, and other parties can file a brief in opposition or support of American’s request but are not required to do so.
In the original case, American argued that cooperation with JetBlue was necessary for it to effectively compete in the New York market, where it was a distant third in share behind United and Delta. United operates a large hub at Newark Liberty International Airport, while Delta has hubs at both New York La Guardia and JFK airports. American is the second largest airline at New York LaGuardia, behind Delta, while JetBlue is the second largest airline at New York JFK, also behind Delta.
Delta is the largest operator at Boston Logan International Airport, while JetBlue is the second largest.
