American Airlines loses appeal in the United States against ruling prohibiting alliance with JetBlue By Reuters

by Nate raimon (NS:) and David Shepardson

(Reuters) – A U.S. appeals court held on Friday that a trial judge correctly determined that American Airlines (NASDAQ 's now scrapped Northeast U.S. partnership with JetBlue Airways (NASDAQ ) violated the federal antitrust law.

Siding with the U.S. Department of Justice, the Boston-based First Circuit U.S. Court of Appeals upheld a judge's ruling blocking the airlines' “Northeast Alliance,” which had allowed The two companies coordinate flights and pool income.

U.S. Circuit Judge William Kayatta, writing for a three-judge panel, said the trial judge had been “presented with an agreement that had many of the essential attributes of an agreement between two powerful competitors who share revenue and share highly concentrated markets.

He said Judge Leo Sorokin, following a bench trial, had issued a ruling in May 2023 with “detailed factual findings, many of which were key unfavorable to American,” and none of which had been thoroughly legally analyzed. clearly wrong.

U.S. Attorney General Merrick Garland called the ruling “a hard-won victory for the millions of Americans who rely on airline competition to fly affordably, whether to visit family or go on vacation. or for business trips.

American Airlines, based in Fort Worth, Texas, said in a statement that it disagreed with the decision and was considering its options. He could ask the First Circuit to reconsider the ruling or file an appeal with the U.S. Supreme Court.

“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,” American Airlines said.

The alliance was announced in July 2020 and approved by the US Department of Transportation just days before the end of Republican President-elect Donald Trump's first administration in January 2021.

The new Trump administration is expected to be much more open to mergers and partnerships than the outgoing administration of Democratic President Joe Biden, whose Justice Department sued to block the alliance in September 2021 along with six states.

Through their partnership, American, the nation's largest airline, and JetBlue, the sixth largest, joined forces for flights in and out of New York City and Boston, coordinating schedules and pooling revenue.

The Justice Department argued that the alliance would harm consumers, saying the partnership eliminated incentives for American to lower prices to attract customers from JetBlue, a historically disruptive rival with often lower fares.

Following Sorokin's ruling, JetBlue ended the alliance as it unsuccessfully attempted to bolster its efforts to gain approval for its now-abandoned $3.8 billion purchase of Spiritual airlines (NYSE:), which the Justice Department also questioned.

American Airlines, however, moved forward with an appeal, saying the ruling would prevent the company from entering into any similar future agreement, including with JetBlue.