A federal judge ruled Friday that JetBlue and American Airlines must end their partnership in the Northeast U.S., a surprise ruling and major blow to both airlines that also casts a shadow over JetBlue's attempt to take over Spirit Airlines.
The so-called Northeast Alliance allows JetBlue and American to coordinate, cross-sell tickets, and carry each other's passengers in and out of New York City-area airports as well as Boston (BOS). But President Joe Biden's Department of Justice sued to put it to a stop, arguing that collaborating instead of competing would hurt consumers by driving up flight prices.
Months after hearing the two sides make their case, a U.S. District Court judge agreed with the Justice Department. Friday's order would force the two carriers to put their partnership to a stop within the next 30 days.
“Though the defendants claim their bigger-is-better collaboration will benefit the flying public, they produced minimal objectively credible proof to support that claim,” U.S. District Court Judge Leo Sorokin wrote in the ruling. “Whatever the benefits to American and JetBlue of becoming more powerful – in the northeast generally or in their shared rivalry with Delta – such benefits arise from a naked agreement not to compete with one another.”
But that doesn't mean flyers will feel the effects of the ruling … or anything at all. The two airlines will likely appeal Friday's ruling. Neither carrier had commented publicly on the decision as of late Friday afternoon.
Regardless of the final outcome, it's a major development that could reshape how airlines work together – or against each other – as they continue climbing back from the depths of the pandemic. And it likely comes as a shock to the airlines themselves: The court had been widely expected to side with JetBlue and American.
American Airlines and JetBlue formed their Northeast Alliance in 2020, hoping that together, they could take on airlines with a greater presence in New York and Boston like United and Delta. The airlines have defended their alliance as a necessary step to counter those bigger airlines, arguing that their combined resources allow them to offer passengers more flights and ultimately lower prices by challenging bigger airlines.
That said, JetBlue and American can't coordinate on airfare pricing – and their cooperation is restricted only to flights in and out of the Northeast, not other markets. JetBlue and American sell tickets on each others' flights and also allow flyers to earn and redeem miles (plus enjoy status benefits) across airlines on select routes.
After getting signoff from President Donald Trump's administration, Biden's Department of Justice sued to undo the partnership in 2021. Separately, the Biden administration has also sued to block JetBlue's attempted takeover of ultra-low-cost carrier Spirit – an even harder sell to get approved.
If the American-JetBlue pact is forced to dissolve, it would have massive ramifications for travelers booked to fly with either carrier in the Northeast U.S. in the months to come. The airlines have traded many routes to one another and struggle to accommodate all the passengers they've sold tickets to without each other's help.
This is a breaking news story, check back for updates.