WASHINGTON (Legal Newsline) - American Airlines is looking to the U.S. Supreme Court for aid as it fights allegations its partnership with JetBlue is bad for customers.
The U.S. Court of Appeals for the First Circuit held last year that the so-called "Northeast Alliance" violated antitrust laws, in a victory for the Department of Justice, six states and the District of Columbia.
American Airlines recently filed its petition asking the Supreme Court to hear the case. It says there is no proof the Alliance created an increase in airline costs or a reduction in competition between it and JetBlue.
"The First Circuit invalidated a joint venture... that increased marketwide competition among all airlines in the congested Northeast without any price increases solely because it reduced competition between the two joint venture partners," lawyers for American wrote.
"That holding flouts basic antitrust principles, creates two circuit splits, and threatens to wreak havoc on productive collaborations of all shapes and sizes."
The agreement would have American and JetBlue sharing revenue and coordinating flights into and out of four major airports – Boston Logan, John F. Kennedy International, LaGuardia and Newark Liberty International.
The companies briefed both the DOJ and the Department of Transportation before announcing the alliance in July 2020. After a six-month investigation, the DOT gave the pact its blessing as long as it increased options for consumers.
But the DOJ and D.C, Arizona, California, Florida, Massachusetts, Virginia and Pennsylvania said it would eliminate significant competition between the two airlines. That fight for customers had led to lower fares and higher quality service, the airlines say.
The agreement was rejected in May 2023 after a bench trial before Judge Leo Sorokin, who had ruled earlier it was likely to harm competition. Schedule-coordination provisions had JetBlue and American acting as one airline, he said.
Plus revenue-sharing left the airlines indifferent as to which company customers chose, he said. Other parts of the NEA were rejected, which caused JetBlue to cancel it. American, however, tried to salvage the NEA with an appeal to the First Circuit.
In at least 13 markets, the NEA gave certain routes to one carrier while the other airline exited, Sorokin determined. He rejected arguments to the contrary from the airlines' experts.
The First Circuit dismissed claims the air travel market increased during the NEA's 20-month life, considering numbers were taken as the America recovered from the COVID shutdown of 2020.
American says the First Circuit failed to determine whether there was a marketwide effect from its partnership with JetBlue. It says five other circuits have recognized that collaboration alone is not sufficient to prove anticompetitive behavior.
"This Court's intervention is needed to resolve these conflicts and ensure that the interests of consumers - not a hostility to collaboration among competitors - governs in Sherman Act cases," American told the Supreme Court.
"Indeed, this is not the only case in which the Government's distortion of the antitrust laws and overly aggressive enforcement has seriously harmed consumers."
Gregory Garre and others at Latham & Watkins represent American.