A judge ruled that American Airlines and JetBlue can unwind their North East Alliance (NEA) for a longer period of time to minimize disruption to consumers.
United States (US) District Court for the District of Massachusetts Judge Leo Sorokin pushed back the effective date after which the two carriers have to end the NEA, ruling that he would provide the final judgment and permanent injunction date later than the current date of June 20, 2023.
“The parties have now made the required filings, which reflect meaningful disputes regarding the terms of the permanent injunction,” read the ruling, continuing that all parties proposed to delay the injunction date.
The US Department of Justice (DOJ), which supported Sorokin’s initial decision, said in a filing on June 9, 2023, that “there is no plausible rationale for [American Airlines and JetBlue] to continue” the NEA. As such, with the two carriers proposing an injunction “that fails to terminate the NEA’s Codeshare Agreement, Frequent Flyer Agreements, and BSPA [Bilateral Special Prorate Agreement]”, the DOJ reminded that the Court “found that the NEA considered as a whole, not merely specific aspects of it, was anticompetitive and illegal; allowing portions of the NEA to remain in place indefinitely would provide incomplete relief”.
American Airlines and JetBlue’s filings on the same day argued that the plaintiffs’ (DOJ’s) proposed final judgment (PFJ) “drastically overreaches by”:
- Invalidating frequent flyer and codeshare agreements
- Proposing a compliance regime “that is vastly disproportionate to the evidence”
- Proposing notice requirements that would reduce consumers’ options
- Requiring an unnecessary monitoring trustee
“The injunction should be limited to the provisions of the NEA that the Court held violate the antitrust laws. It should not cover the Codeshare Agreement, the Frequent Flyer Agreements, or the Bilateral Special Prorate Agreement,” continued the two airlines’ filing.
Previously, Sorokin ruled that the NEA would have to be dissolved within 30 days from May 19, 2023, when the court found that the alliance broke competition laws within the US, namely the Sherman Act.
The Sherman Act is a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade,” according to the US Federal Trade Commission (FTC).