American Airlines is asking the U.S. Supreme Court to overturn a lower court ruling that blocked a now-abandoned partnership with JetBlue Airways on federal antitrust law grounds.
The federal government has been directed to file a response with the court by April 2.
The alliance was approved by the Department of Transportation days before the end of President Donald Trump’s first administration in January 2021.
The petition states that the point of the alliance was to allow the two airlines to pool resources in order “to create a broader, more competitive network with a greater total number of flights, destinations, and departure times than the Airlines could offer individually or collectively without collaboration.”
The pacts that formed the alliance provided, among other things, for “revenue-sharing,” “reciprocal loyalty benefits,” and allowing customers to “book a flight operated by one carrier on the other carrier’s website,” according to the petition, which states that the airlines did not coordinate on fares.
The alliance operated successfully for 20 months before the federal government’s lawsuit against the airlines came to trial. In that period, “it is undisputed that the Airlines’ flight output increased substantially at [affected] airports,” the petition states.
“Growth was so significant that by the time trial commenced, the [alliance] had substantially exceeded certain growth commitments that the Airlines had made to the Department of Transportation ... before the [alliance] took effect,” it states.
Under President Joe Biden, the federal government and several states sued in September 2021 under the federal Sherman Act to end the alliance, arguing that it harmed consumers.
The government argued, based on a simulation of the merger, that prices would rise in the future and that the harm caused by increased prices would outweigh the benefits of the alliance, according to the petition.
Although the federal district court rejected the government’s theory that based on the simulation prices would go up, it ruled against the airlines in May 2023 and issued a permanent injunction against the alliance under the Sherman Act.
The court said the alliance was so “obviously anticompetitive” that it should be invalidated without any “deep and searching analysis,” the petition states.
After the court’s ruling, JetBlue left the alliance.
That ruling “flouts basic antitrust principles, creates two circuit splits, and threatens to wreak havoc on productive collaborations of all shapes and sizes,” and the Supreme Court has found that there is nothing unlawful about two competitors pooling their resources, the petition states.
American Airlines argues in the petition that the Supreme Court should take up the appeal because the Sherman Antitrust Act of 1890 is being misused.
“Antitrust enforcers and courts like the First Circuit have transformed the Sherman Act from an engine for enhancing consumer welfare into a sword for invalidating pro-consumer collaborations based solely on reductions in rivalry that do not harm consumers and are inherent in such collaborations,” the petition states.
The Epoch Times reached out to the Department of Justice, which represents the federal government, for comment. No reply was received by publication time.
