American Airlines asks US court to overturn ruling barring JetBlue alliance

By Nate Raymond

BOSTON (Reuters) – American Airlines (NASDAQ:) has asked a U.S. appeals court to reverse a judge’s decision that sided with the U.S. Department of Justice and declared that its now-scrapped U.S. Northeast partnership with JetBlue Airways (NASDAQ:) was anticompetitive.

American Airlines in a brief filed late on Wednesday told the Boston-based 1st U.S. Circuit Court of Appeals that while its joint venture with JetBlue is over, the judge’s ruling invalidating their partnership must be overturned because it threatens a wide range of other collaborations between competitors.

American said U.S. District Judge Leo Sorokin’s “sweeping” decision ruled against their partnership even though joint ventures are “virtually never” deemed illegal under antitrust law “because they usually have a pro-competitive rationale.”

The airline’s lawyers said Sorokin’s ruling flouted U.S. Supreme Court precedent and “wrongly terminated a beneficial commercial arrangement that added more flights, more seats, and more options for consumers without raising prices.”

“If left unchecked, the district court’s decision will discourage fruitful and lawful collaboration that benefits consumers through increased output, decreased prices, and improved product quality,” American Airlines’ lawyers wrote.

The Justice Department and JetBlue did not respond to requests for comment.

Sorokin in May sided with the Justice Department and six states in a lawsuit challenging the joint venture that American and JetBlue entered into in 2020, called the “Northeast Alliance.”

Through their partnership, American, the nation’s largest airline, and JetBlue, the sixth largest, joined forces for flights in and out of New York City and Boston, coordinating schedules and pooling revenue.

Following Sorokin’s ruling, JetBlue terminated the alliance, as it focused on defending a proposed $3.8 billion purchase of Spirit Airlines (NYSE:) against a separate Justice Department antitrust case seeking to block that deal.

Closing arguments in that case took place on Tuesday.

Lawyers for American Airlines in Wednesday’s brief said that while its partnership with JetBlue was over, the case was not moot, as American remains subject to a permanent injunction that restrains commercial arrangements it could later enter into.

That injunction bars American and JetBlue from entering into any similar arrangements for 10 years and requires the airlines to notify the Justice Department before entering into other agreements.