A partnership between American Airlines Group Inc and JetBlue Airways Corp violated US antitrust law, an appellate court ruled, affirming a lower court decision to end the alliance. 

The airline alliance harmed consumers by reducing their choices for flights from airports in the Northeast US, including New York City, a three-judge panel on the 1st US Circuit Court of Appeals in Boston said on Friday in a unanimous decision. The case was part of the Biden administration’s more aggressive stance on corporate mergers in several industries to ensure combinations don’t hurt consumers or drive up prices. 

“Presented with an arrangement that had many of the essential attributes of an agreement between two powerful competitors sharing revenues and divvying up highly concentrated markets, the district court conducted a month-long proceeding, after which it made detailed findings of fact,” the judges wrote. The panel found “no reversible error of either fact or law” by the trial court.

American, in an emailed statement, said it is reviewing the ruling and considering options. 

“The Northeast Alliance was designed to increase competition and expand customer options in the Northeast, which it clearly did during the time it was allowed to operate,” the carrier said.

JetBlue, which is focusing on rebuilding its operations as a stand-alone carrier to return to profitability, declined to comment on Friday’s ruling. 

But on a recent conference call, the carrier’s president, Marty St George, said the airline is considering “some level of partnership going forward”. He added, “It certainly could be with American and it could be with another carrier.”

Shares of American had risen 1.4% to US$13.81 at 2.34pm in New York trading, while JetBlue climbed 4.3% to US$6.31. Other airlines also increased, along with broader markets on Friday.

Last year, US District Court judge Leo Sorokin ruled after a trial that the alliance, formed in 2020, would reduce competition and lead to higher prices for consumers and ordered it unwound. American appealed, arguing that the order imposed by Sorokin would prevent it from entering future partnerships. 

The lawsuit challenging the American-JetBlue partnership was the US Justice Department’s first against an airline deal since 2013. Antitrust enforcers later successfully blocked JetBlue’s proposed deal to buy Spirit Airlines Inc. 

The case is US v American Airlines Group Inc, 23-1802, 1st US Circuit Court of Appeals (Boston).

  - Bloomberg