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US Supreme Court dismisses American Airlines' appeal of the ruling that bars JetBlue alliance

The U.S. Supreme Court denied on Monday the request of American Airlines that a court decision overturning a ruling that found that American Airlines' now-scrapped U.S. Northeast Partnership with JetBlue Airways had violated federal antitrust laws.

The Supreme Court rejected an appeal from American Airlines against a lower-court decision that was made in a case brought by the U.S. Justice Department. This lawsuit led to the demise of the "Northeast Alliance" which would have enabled the two carriers coordinate flights and pool revenues. American Airlines described the Supreme Court's refusal to hear the case as disappointing. It had argued the 1st U.S. Circuit Court of Appeals in Boston's ruling was wrong. Circuit Court of Appeals embraced a hostile attitude towards collaboration between businesses, and invalidated a venture that increased competition in the market.

American Airlines released a statement saying that the Northeast Alliance was created to increase competition in the Northeast and to expand the options for customers. It was able to do this during the period it was permitted to operate.

American Airlines, the largest airline in the United States, and JetBlue, which is the sixth largest, have teamed up to fly into and out of New York City, Boston and coordinating their schedules, while also pooling revenues.

The 1st Circuit's ruling in November came as a result of a lawsuit that the Justice Department, along with six other states, filed in 2021 during Democratic President Joe Biden’s administration. Under Biden's administration, the Justice Department gave a high priority to boosting airline competition and enforced U.S. Antitrust laws aggressively. The Justice Department, under Republican President Donald Trump, continued to defend government's win in the American Airlines/JetBlue case despite a change of administrations.

The alliance was announced by the U.S. Transportation Department in July 2020, and approved just a few days before Trump's first term ended in January 2021.

The Justice Department claimed that the alliance would harm consumers by removing incentives for American Airlines to lower prices in order to attract customers away from JetBlue, an historically disruptive competitor with low fares. In Boston, U.S. district judge Leo Sorokin sided with Justice Department in 2023 and found that the alliance was illegal. JetBlue ended the alliance after Sorokin’s ruling. It was trying to gain approval for its now-rejected $3.8 billion purchase of Spirit Airlines. Biden’s Justice Department had also successfully challenged the deal.

American Airlines filed an appeal, however, because it said the ruling would prevent them from entering into a similar arrangement in the future, including one with JetBlue. The 1st Circuit, however, upheld Sorokin’s decision. (Reporting and editing by Will Dunham in Boston, with Nate Raymond reporting from Boston)

(source: Reuters)