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JetBlue (also written as jetBlue) will no longer be partnering with American Airlines. Up until now, the two airlines had engaged in code-sharing and other collaborations as a part of the NEA or Northeast Alliance, a group of airlines that operate in the northeastern states of the US, but the Justice Department has ruled that this violates the Unites States’ antitrust law.
What Is an Antitrust Law?
Antitrust laws are put in place to encourage competition in the market. They are meant to limit the marketing power of one entity by disallowing the merging of numerous entities into one in an effort to form a monopoly or put all the power into the hands of one group, company, or person.
They also work to break up monopolies that are already in place, or to check the power of a company that has singlehanded control of a particular market.
The NEA Is Coming to an End
As per the Justice Department’s ruling, JetBlue and American Airlines will go their separate ways, breaking up the alliance that was formed between them, in large part because they are both based in the American Northeast. Having the two companies work so closely together unfairly pushed out other competition in the area, something that JetBlue acknowledged in a recent statement.
“Despite our deep conviction in the procompetitive benefits of the NEA, after much consideration, JetBlue has made the difficult decision not to appeal the court’s determination… and has instead initiated the termination of the NEA, beginning a wind-down process that will take place over the coming months.”
American Airlines, on the other hand, does not want to take U.S. District Judge Leo Sorokin’s ruling lying down. While its spokesperson said that it respects that JetBlue will not be appealing, it will attempt an appeal to this ruling on its own anyway.
JetBlue Has Other Options
JetBlue, however, may not be interested. Now that its partnership with American Airlines is ending, it has decided to focus on getting back to the agreement it once had to buy Spirit, an even bigger low-cost airline, for $3.8 billion.
Last year, that purchase was also deemed to be in violation of the antitrust law, but now that the NEA will be broken up, JetBlue is hoping that the judge will reconsider.
For JetBlue, this could actually be the better of the two deals: instead of being partners with another northeastern company, it will be combined with a company whose clientele is spread across the entire nation. If that deal goes through, JetBlue would instantly grow to make up 10% of the air travel market, putting it on par with the likes of Delta, Southwest, United, and even American Airlines itself.
The trial date for the JetBlue-Spirit merger has been set for October 2023.