JetBlue Airlines recently issued a press release to announce plans to terminate the Northeast Alliance (NEA) following a court's ruling that it cannot continue in its current form. The decision comes after a legal battle with the Department of Justice (DOJ) regarding antitrust concerns.
"With strong momentum, a clear organic plan, and the procompetitive Spirit combination on the horizon, we are ready to be a force for good in the industry on a more national scale and look forward to advancing our planned combination with Spirit," JetBlue said.
According to an official statement issued by JetBlue on July 5, JetBlue will not appeal the court's decision regarding the Northeast Alliance (NEA) and has initiated the termination of the alliance. In an official statement, JetBlue disagreed with the Department of Justice's (DOJ) proposal, stating that "the DOJ's proposal is too onerous and overreaching, ignoring arguments the DOJ itself presented at trial about the benefits of similar aspects of other domestic carrier partnerships."
"After much consideration, JetBlue has made the difficult decision not to appeal the court's determination that the NEA cannot continue as currently crafted, and has instead initiated the termination of the NEA," the statement from JetBlue read.
This development follows a complaint filed on March 7, 2023, by the DOJ, alleging that JetBlue's proposed acquisition of Spirit Airlines for $3.8 billion violated Section 7 of the Clayton Act. The DOJ argued that the merger would limit choices for passengers and lead to increased ticket prices across the country, considering the industry is already concentrated. Subsequently, the DOJ filed a civil antitrust lawsuit in the U.S. District Court for the District of Massachusetts to halt the JetBlue-Spirit merger.
As previously reported by the Federal Newswire, the recent ruling in favor of the DOJ and the attorneys general of six states and the District of Columbia came after concerns were raised regarding potential antitrust violations resulting from the partnership between JetBlue and American Airlines. The trial, which commenced in September and lasted several weeks, concluded that the collaboration between the two airlines violated Section 1 of the Sherman Act. The court found that both companies had entered into an agreement that suppressed competitive pricing in vital markets, ultimately reducing choice for American travelers and driving up fares.
As the termination of the Northeast Alliance takes effect, industry experts and stakeholders will closely monitor the ensuing developments and assess the implications for both JetBlue and the broader airline market. The outcome of the JetBlue-Spirit combination will undoubtedly shape the competitive landscape of the industry and potentially influence future regulatory actions in the sector.
