American Airlines seeks millions from JetBlue after failed alliance

(CN) — Nearly two years after federal courts dismantled their partnership, American Airlines and JetBlue Airways are facing off in a financial dispute over the remnants of their failed alliance.

American Airlines filed suit Monday in the Texas Business Court, claiming JetBlue has failed to make payments exceeding $1 million that it owes from their terminated Northeast Alliance (NEA), a partnership federal judges deemed illegal on antitrust grounds.

At the heart of the dispute is a revenue-sharing mechanism established when the carriers joined forces in 2020 to challenge Delta and United’s dominance in Boston and New York markets.

“JetBlue has refused to make payment under the [Mutual Growth Incentive Agreement] of either amount,” American Airlines said in the complaint, adding that JetBlue’s own calculations of the amount owed were only about 6% apart from American’s.

The complaint was submitted by Dee J. Kelly Jr., an attorney with Kelly Hart & Hallman LLP representing American Airlines.

The lawsuit represents the latest chapter in a partnership that began with regulatory approval but collapsed under federal antitrust scrutiny. While operational aspects of the alliance ended in 2023 following a court order, American insists that financial obligations for flights completed during the partnership remain due.

In the lawsuit, American Airlines says the final judgment terminating the Northeast Alliance explicitly permitted the airlines to “complete the audit, reconciliation, and payment processes set forth in the NEA Agreements in order to settle their obligations to one another with respect to flights flown on or before July 18, 2023.”

American Airlines says it sent JetBlue detailed financial reports and a final invoice on Jan. 9, 2024, covering the period between April 2022 and July 2023, but has received no payment.

The alliance’s troubles began shortly after it took effect in February 2021, when the Department of Justice challenged it as anticompetitive. U.S. District Judge Leo Sorokin eventually agreed, writing in May 2023 that “whatever the benefits to American and JetBlue of becoming more powerful — in the northeast generally or in their shared rivalry with Delta — such benefits arise from a naked agreement not to compete with one another.”

“Such a pact is just the sort of ‘unreasonable restraint on trade’ the Sherman Act was designed to prevent,” Sorokin added.

The airlines’ appeals unsuccessfully appealed the ruling. In November 2024, the First Circuit upheld the lower court’s decision, with U.S. Circuit Judge William Kayatta writing that the partnership “led to decreased capacity, lower frequencies, or reduced consumer choices on multiple routes, including some that are heavily traveled.”

American said in the suit that the Northeast Alliance was originally established to “expand each airline’s network and enhance services for passengers” by optimizing schedules, equipment assignments, and other logistics.

The airline’s lawsuit seeks monetary relief exceeding $1 million plus interest, attorney fees and costs.

American Airlines is headquartered in Fort Worth, where the suit was filed.

JetBlue has not yet filed a response to the lawsuit.

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