Analysis: Unpicking The Northeast Alliance

JetBlue airbus a320
Credit: JetBlue

The US Justice Department on May 19 won its lawsuit against American Airlines and JetBlue Airways, with a federal judge ordering the carriers to unwind their Northeast Alliance (NEA) within 30 days, barring an appeal.

U.S. District Judge Leo Sorokin ruled that the combined strategy—which has seen the airlines coordinate their schedules at Boston Logan International Airport (BOS) and at airports in the New York area for more than two years—violates the Sherman Antitrust Act. The Sherman Act was passed by Congress in 1890 as a “comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.”

Judge Sorokin’s 94-page ruling concluded that the NEA pact “substantially diminishes competition” in the U.S. domestic market by combining the Boston and New York operations of two airlines that are “among the most significant competitors in that region.” The judgment described the carriers as operating as a single entity in the northeast, dividing markets between them and replacing vigorous competition with broad collaboration.

The ruling emphasized that the arrangement disturbed the competitive balance across the entire region and beyond, rather than being limited to specific overlapping routes or a few points of origin and destination.

American and JetBlue were instructed by the court to be “permanently enjoined from continuing, and restrained from further implementing” the NEA. While an appeal is anticipated—with American expressing disagreement with the decision and saying it was considering its next course of action—unwinding an alliance that has been operational for more than two years will present substantial challenges.

The NEA was launched by the carriers in Feb. 2021 and, despite the lawsuit brought in Sept. 2021, the two have expanded and restructured their networks to support the partnership, asserting that it promotes competition. American and JetBlue argued that without the alliance, they would struggle to effectively compete with Delta Air Lines and United Airlines in the lucrative U.S. northeast market.

Since its inception, the NEA has resulted in the introduction of approximately 50 new routes from New York John F. Kennedy (JFK), LaGuardia (LGA), Newark (EWR) and Boston, as well as increased frequencies on more than 130 existing routes, 90 nonstop routes with enhanced capacity and the launch of 17 new international routes, according to the carriers. Among the opened routes include American’s services from JFK to Doha and Guayaquil, as well as JetBlue’s flights from JFK to Vancouver.

Analysis of data provided by OAG Schedules Analyser reveals that American and JetBlue codeshare on 154 airport pairs in May 2023, with approximately 41.6% of those routes originating from JFK and 32.5% from LGA. Since the launch of the NEA, JetBlue has placed significant emphasis on growth from these two New York airports, having previously faced challenges in obtaining additional slots.

The alliance provided JetBlue with an opportunity to expand operations through a series of slot lease agreements with American, enabling the carrier to more than triple its seat capacity from LGA compared with pre-pandemic levels and swell it by around 11% from JFK. In turn, American benefited from the increased feed provided by JetBlue for its international routes.

During May 2023, JetBlue has more than 1 million departure seats on offer from JFK and LGA combined, marking a total rise of 28% compared with May 2019. Capacity from EWR is also up by almost 22% to 117,000 departure seats comparing the same periods.


Analysing schedules data for May 2023 shows that JetBlue has increased its share of departure seats from JFK to 25.4%, compared with a 22.4% share in May 2019. Similarly, American’s share has risen from 9.9% to 13.4%. Delta continues to maintain the largest market share from JFK, accounting for 30.1% of departure seats.

At LGA—where American is the second-largest carrier behind Delta, and JetBlue the third-largest—the NEA partners are this month offering a combined 627,000 departure seats, up by 17% on May 2019. American has a 23% capacity share of the market, JetBlue has 11.5% and Delta has 40.3%. Compared with May 2019, JetBlue’s capacity is up by more than 140,000 monthly departure seats, while American’s is down by almost 50,000.


Newark also sees American and JetBlue providing 11% more capacity now than before the pandemic, with a combined 230,000 departure seats. The airlines each have about 4.5% of the market, behind Delta on 68.6% and Spirit Airlines on 5.5%.

In Boston, JetBlue and American have maintained their number-one and number-three positions, respectively—as occupied in May 2019. However, when comparing pre-pandemic levels, Boston is the only one among the four airports in the NEA where the combined capacity has decreased. JetBlue is operating 4% fewer seats this month compared to four years ago, while American is lower by 15.4%.

Looking at OAG daily departures data for May 19—the day Judge Sorokin’s verdict was published—American and JetBlue offered a combined 499 flight departures from the New York area, split 251-248 in favor of American. This compares with 524 for Delta and 441 for United. From Boston, JetBlue and American offered 149 and 72 flights, respectively, compared to 151 provided by Delta.


Although the NEA has achieved its aims of creating a relevant third rival in the northeast to counter Delta and United, this argument contributed to its undoing. The judgment blocking the alliance stated that federal antitrust law focuses on preserving free and unfettered competition, rather than making individual competitors larger or more powerful.

“This case turns on what ‘competition’ means,” the ruling stated. “To the defendants, competition is enhanced if they join forces to unseat a powerful rival. The Sherman Act, however, has a different focus. Federal antitrust law is not concerned with making individual competitors larger or more powerful. It aims to preserve the free functioning of markets and foster participation by a diverse array of competitors.”

The judgment found that the NEA has significantly transformed the competitive landscape by reducing the number of competitors, resulting in fewer choices for consumers. “There is simply no credible evidence that American and JetBlue have continued to treat each other as competitors,” it said.

The court found the alliance has also diminished JetBlue’s independence and eroded its position as a significant and “maverick” competitor—and has enabled the airlines to engage in horizontal market division, a practice that has consistently been deemed anticompetitive under antitrust law.

In adjusting their overall network priorities, the judgment said that the focus on New York has come at the expense of some pre-NEA plans to devote resources to growth elsewhere. It highlighted American’s decision to remove aircraft out of its hub in Philadelphia to launch new transatlantic flights from JFK and support growth in the NEA region.

“For JetBlue, reconfiguring its fleet to cover the slots American leased to it and the markets allocated to it as part of the NEA’s optimized schedule has meant revising or pausing JetBlue’s earlier growth plans in other focus cities, such as Fort Lauderdale,” the decision added.

American and JetBlue have been given 30 days to unwind the alliance, but an appeal is expected to be lodged within 21 days that should allow for existing schedules to be maintained during the northern summer 2023 season. However, if the verdict stands, unravelling the NEA will be complex and detrimental to both carriers.

“We view the ruling as most negative for American, at least in the medium term, with the NEA enabling it to reallocate capacity away from marginal or unprofitable routes while still maintaining a strong presence in the northeast,” analyst Savanthi Syth, of Raymond James, said in an update to clients.

“While American will likely regain its slots leased to JetBlue, it will now have to rebuild JFK and LaGuardia at likely lower profitability, given its reliance on regional jets and with the lack of feed from JetBlue.”

Syth added that JetBlue will also be unable to recoup the investment made into building its corporate position in New York and will lose the ability to further grow in its slot-constrained home market.

David Casey

David Casey is Editor in Chief of Routes, the global route development community's trusted source for news and information.