After much deliberation, the U.S. district judge has officially ruled to terminate an ongoing alliance between major U.S. carriers of American Airlines and JetBlue.
The Northeast Alliance as its known (NEA) was launched formally in 2021 and caught headlines for what it meant for the industry. The pair could work together effectively to strengthen their position on the market and had a lot of control regarding swapping schedules, slots and more in the Northeast.
The focus was put mainly on the New York corridor, where American Airlines had outlined growth plans but struggled to grow themselves, organically at least they believed effectively. American Airlines saw potential in using this to its advantage thanks to the already established JetBlue and its respective capabilities. However, for those concerned about what this would do to the broader U.S. industry, the pair claimed it would only see more benefits.
Only months after its establishment, though, a significant pushback was seen, and attempts to block the partnership began emerging. However, it turned out that these respective parties only saw it negatively impacting customers and the U.S. industry, contrary to what the airlines claimed when they first put pen to paper on a collaborative effort.
In a final ruling, the Judge determined that the establishment of the said alliance didn’t align with the airlines’ goals outlined. Instead, they said that the companies focused solely on benefiting themselves and, if anything, taking further competition away. If this is seen in any part of the industry, it will likely always end in termination or rejection in attempts to partner/merge.
The priority is to ensure competitors can still operate and have a fair share of the market and prices don’t increase to push consumers away.
Despite the ruling, both airlines have openly expressed their frustration with the decision, explaining that the order was incorrect and that the critical points outlined were false. Implying there was a misconception of the Northeast Alliance that the two airlines believed they had communicated the purpose effectively already.
There are parties on either side of the fence with this ruling; some believe the alliance wasn’t appropriately handled, and others think the partnership benefits. Nevertheless, they are frustrated by the verdict.
Whatever comes from this will be closely followed, especially as JetBlue attempts to tie the knot with Spirit Airlines, another U.S. airline, in a merger to increase market share and bring them closer to other major players. This merger has been heavily scrutinised and isn’t closer to approval than rejection.
