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American Airlines and JetBlue Airways launched a strategic partnership in 2021 known as the Northeast Alliance. This allowed for codeshares, frequent flyer reciprocity, and closer alignment between the two carriers. The thought behind the pairing was that American struggled to build its presence in NYC organically and that JetBlue could feed traffic so that it could use New York as an international gateway. This sounded good in theory and has been in place for the past two years.
The Department of Justice (DOJ) filed a lawsuit in September 2021 challenging this alliance. The trial began in Boston in 2022. The DOJ argued that this was anti-competitive and this case played out in court until December 2022. Today, a federal judge permanently ended the partnership and dissolved the alliance effective 30 days from today. Since this a huge blow for both airlines as summer begins next month, an appeal is almost a certainty.
It’s also unclear in a separate case if JetBlue will be able to complete its acquisition of Spirit Airlines. The DOJ has separately said that the combo will drive up fares and the Biden administration has said that it will take a hard line against perceived anti-competitive deals. This would be another blow for JetBlue.
Neither airline nor the DOJ have commented on the outcome and it’s unclear as to what exactly the dissolution entails. They won’t be able to codeshare, but can they offer reciprocal benefits? Can they partner in other ways? This is unprecedented and will take some time for experts to provide an analysis.
Anthony’s Take: American Airlines does not have a huge NYC presence. It has focused on Philadelphia and lost a lot of ground in New York over the past several years. This alliance gave them a shot at competing with Delta Air Lines and United Airlines. Without it, the market doesn’t seem like it will do much for the carrier. More to come as this gets digested and analyzed.
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