A United States federal judge denied a motion by JetBlue and American Airlines to throw out the antitrust challenge brought against the Northeast Alliance by the Department of Justice.
Three weeks and it’s not over yet
In its third week of trial, the Northeast Alliance (American and JetBlue) filed a motion to dismiss the DOJ’s antitrust challenge against the alliance, claiming that the alliance eliminates competition in the northeast. According to United States District Judge Leo Sorokin, the case is too vital to make a ruling without a full trial.
Not only is this case critical because of the significance and precedent it can set for future alliances and mergers in the airline industry, but the government has brought forward an almost novel legal theory. The DOJ has sued the airlines in the Northeast Alliance under the Sherman Act, which usually requires proof that a practice is detrimental to consumers, which the DOJ has not been able to provide.
On the other end of things, the airlines have provided plenty of evidence that routes and frequencies have increased significantly in the 20 months since the creation of the alliance. JetBlue and American have also submitted evidence that through the partnership, it has been easier to compete in markets dominated by United Airlines and Delta Air Lines.
Photo: Lukas Souza | Simple Flying
Before basing its argument on the Sherman Act, the DOJ tried to use the Clayton Act in its favor. The Clayton Act applies to mergers and states that the government can enjoin a merger without showing harm to consumers as long as it can prove that a merger will more than likely increase competition. The DOJ is arguing that the alliance has reduced competition, then allowing it to use that to then use the Sherman Act in its defense.
A defense like this has never been presented and is unconventional. Whichever way Judge Sorokin rules may set a precedent for future cases and could be an explanation for his requiring so much evidence.
Through cross-examination of the witnesses provided by the DOJ, the airlines’ lawyers have emphasized how the alliance differs from a merger. American and JetBlue do not share profits, coordinate prices, or consult each other on business decisions. The DOJ has been unable to show evidence that the airlines have increased airfare or reduced their services, leaving them to attempt to prove that the airlines in the Northeast Alliance will do so in the future.
Photo: Lukas Souza | Simple Flying
From the beginning, it was known that the trial could last up to three weeks. At some point during the trial, the expectation was set that the trial would end on Monday, but it seems that it will last beyond Monday due to Judge Sorokin denying the motion.
Quick overview of the Northeast Alliance
The Northeast Alliance was formed in 2020 between American Airlines and JetBlue to take advantage of each other’s networks and services and compete with United and Delta, both airlines with solid footholds in the Northeast.
American Airlines provides JetBlue’s passengers better access to the Sunbelt through the alliance. And while American Airlines has a more substantial presence in the Sunbelt, JetBlue is a big player on the East Coast and the northeast.