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Update 20:25: Add the American Airlines comment.
American airlines (NASDAQ: AAL) and JetBlue (NASDAQ:JBLU) lost a battle with the Justice Department after a judge ruled that the companies must dissolve an alliance that covers JetBlue flights in the Northeast US. fell 1.8%while the US fell 1.5%.
“The question before the Court is whether the NEA suppresses or promotes competition,” US District Judge Leo Sorokin wrote in his decision Friday. “The record supports only one answer. American and JetBlue substantially lessen competition in the domestic air travel market. It does so by combining the Boston and New York operations of two airlines that are among the largest competitors in that region.” .
Judge Sorokin ruled Friday that JetBlue (JBLU) and American (AAL) are permanently barred from continuing Northeast Alliance, effective thirty days from the date of the order.
The trial was held in September. Six states and the District of Columbia joined the Justice Department in filing the antitrust lawsuit in 2021 to block a notable 2020 agreement between the two airlines to sell seats on each other’s flights on certain routes.
JetBlue (JBLU) said it is reviewing the decision in its entirety and evaluating its next steps.
“We are disappointed with the decision,” JetBlue (JBLU) said in a statement. “We made it clear at trial that the Northeast Alliance has been a huge win for customers. Through the NEA, JetBlue has been able to significantly grow at restricted Northeast airports, bringing the airline’s low fares and excellent service to more routes. than would have been possible.” possible otherwise.“
American Airlines (AAL) said it believes the decision is wrong and is considering next steps.
“The Court’s legal analysis is clearly incorrect and unprecedented for a joint venture such as Northeast Alliance,” American Airlines (AAL) said in a statement. “There was no evidence on record of any harm to the consumer by the association, and there is no legal basis for inferring harm simply by virtue of the collaboration.”
In the lawsuit, the Justice Department described the arrangement as tantamount to an illegal merger. Test management has added significance with JetBlue (JBLU) in a $3.8B deal to buy Spirit Airlines (SAVE).
The DOJ filed an antitrust lawsuit to block the proposed merger of JetBlue Airways (JBLU) with Spirit Airlines (SAVE) in March. The complaint alleged that the combination of the two airlines would be an adverse development for consumers, raising prices and eliminating competition.
Some have argued, including a Dealreporter story in September, that a Northeast Alliance DOJ block may actually be a win for the Spirit Airlines (SAVE) deal, as it will strengthen the companies’ case for a merger.
Spirt Airlines (SAVE) pared some of its decline on the news and ended Friday down 1.2%.
More about JetBlue/Spirit
- JetBlue and Spirit merger has a chance
- JetBlue – Spirit Airlines merger hits a snag, Spirit shares have the upper hand