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American, JetBlue alliance in northeastern U.S. blocked by judge


Shares of American Airlines Group Inc. and JetBlue Airways Corp. dropped late Friday after a U.S. judge sided with the Justice Department in a lawsuit aimed at undoing the airlines’ joint venture in airports in the Boston and the New York City areas.

In separate statements, both JetBlue
JBLU,
-1.80%

and American Airlines
AAL,
-1.53%

said they are considering their next legal steps and reaffirmed their contention that their alliance is beneficial to consumers.

JetBlue said that the agreement “has been a huge win for customers,” allowing it to grow in “constrained” northeast airports and to offer more routes.

American said the court was wrong in blocking the Northeast Alliance, as the joint venture is called, and that there was “no evidence in the record of any consumer harm from the partnership, and there is no legal basis for inferring harm simply from the fact of collaboration.”

The Justice Department sued in September 2021, shortly after the partnership was formed, saying that the alliance would eliminate “important competition” in the Boston and New York City areas and also harm air travelers across the country “by significantly diminishing JetBlue’s incentive to compete with American elsewhere, further consolidating an already highly concentrated industry.”

The airlines have long argued that, on the contrary, their alliance brought more choice to consumers as they added several nonstop flights out of the area’s airports.

The Justice Department has not yet commented on the order as of late Friday.

Friday’s decision has bigger implications for JetBlue, which in March was hit with another lawsuit by the Justice Department, this time one aimed at blocking its merger with Spirit Airlines Inc.
SAVE,
-1.20%

JetBlue battled for Spirit with Frontier Group Holdings Inc.’s
ULCC,
-1.99%

Frontier Airlines and Wall Street is split on whether that merger will win approval.

Shares of JetBlue dropped 0.3% in the extended session Friday, after a loss of 1.8% in the regular trading day, while American shares were off less than 0.1% after a decline of 1.5% in the regular session.



This story originally appeared on Marketwatch

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