JetBlue Airlines and American Airways announced Friday that they will be ending their Northeast Alliance partnership on July 21. The move comes after a Boston federal judge ruled in May that the two titans of the air industry must end their two-year-old partnership.
Under the deal, the two companies sold seats offered by the other on routes to three airports serving New York City and Logan International Airport in Boston. The airlines would then share the profits of these reservations, also known as “codeshare” bookings.
Judge Leo T. Sorokin, who issued the ruling, wrote that the arrangement would hurt competition and raise fares if allowed to stay intact. Since going into effect in 2021, he found it had already “substantially” diminished competition amongst U.S. airway companies.
The Justice Department argued that the partnership would have cost travelers millions of dollars every year if it remained.
JetBlue has announced that they do not plan to challenge the ruling. American, however, issued a statement saying that while they respect JetBlue’s "focus on its other antitrust and regulatory challenges," they plan to contest the judgment.
The Northeast Alliance was largely favorable to American Airlines. It was struck to help American compete in the New York market, where it had been experiencing lulls in bookings. The partnership let American keep its presence in the Empire State whilst simultaneously doing away with routes that had not been profitable, and sending traffic to global partners.
Beginning on Friday, travelers will no longer be able to book new codeshare flights with American or JetBlue. Those who have already booked upcoming codeshare flights will still be accommodated, however, as many of those flights are planned to continue as scheduled. “To the extent any individual customers are impacted, JetBlue will reach out individually for any required re-accommodation or refund,” reads the company’s briefing on the Northeast Alliance’s dissolution.
However, members of JetBlue's TrueBlue rewards program will continue to earn points and tiles on future travel booked with American, as long as your TrueBlue number is added to the booking no later than this Thursday, July 20.
JetBlue's Mosaic members will likewise be entitled to perks on previously booked flights with American as long as they add their TrueBlue number to the applicable account by July 20.
Travelers reacted to the news with frustration, particularly regarding cancellations for flights booked with the other airline.
JetBlue and American argued that their union was necessary to compete with airlines such as United and Delta in Northeastern airports.
Judge Sorokin, however, did not see the sense in this.
“Though the defendants claim their bigger-is-better collaboration will benefit the flying public, they produced minimal objectively credible proof to support that claim,” Judge Sorokin wrote in his May 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.”
Under President Biden’s administration, the Justice Department has increased efforts to enforce antitrust laws, especially in the areas of technology and air travel.
The Justice Department has also sued to block JetBlue's planned $3.8 million acquisition of Spirit Airlines, a small but increasingly disruptive force in the industry. Antitrust regulators see JetBlue’s actions in pursuing Spirit, as well as the Northeast Alliance, as evidence that the company “has fewer reasons to continue to compete aggressively” with the country’s largest airlines.
That case is expected to go to trial later this year.
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