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American, JetBlue Must Face Antitrust Suit by US, Six States

June 9, 2022, 4:52 PM

JetBlue Airways Corp. and American Airlines Group Inc. must face antitrust litigation from the Justice Department and several states after a federal judge denied the companies’ motion to dismiss the lawsuit.

The US government’s complaint plausibly alleged that the alliance between the airlines, dubbed the Northeast Alliance, is likely to harm competition, Judge Leo S. Sorokin of the US District Court for the District of Massachusetts wrote Thursday in his denial of the motion.

Other issues raised in the airlines’ dismissal motion—such as the definition of the New York market and whether the alliance will increase competition that otherwise wouldn’t be achievable—are best resolved through later proceedings, Sorokin said.

“The Complaint alleges—plausibly and in a manner that is neither conclusory nor threadbare—that the alliance at issue between American and JetBlue is likely to harm competition in the relevant markets, and that American and JetBlue control a significant share in an already concentrated market,” Sorokin wrote.

The Justice Department and attorneys general from Arizona, California, Florida, Massachusetts, Pennsylvania, Virginia and the District of Columbia sued the airlines in September 2021 in a bid to unwind their agreement to coordinate flights in the Northeastern US

The alliance, which also allowed American and JetBlue to book travelers on each others’ flights and offer loyalty-program benefits, violated antitrust laws by eliminating competition, the suit said.

The case is scheduled to go to trial on Sept. 26.

The case is US v. American Airlines Group Inc. et al, D. Mass., No. 1:21-cv-11558, motion denied 6/9/22.

To contact the reporter on this story: Dan Papscun in Washington at dpapscun@bloombergindustry.com

To contact the editor responsible for this story: Roger Yu at ryu@bloomberglaw.com