On November 8 (Reuters) – A U.S. appeals court confirmed on Friday that a trial judge was correct in determining that the now-canceled partnership between American Airlines (AAL.O) and JetBlue Airways (JBLU.O) in the U.S. Northeast breached federal antitrust regulations.

The 1st U.S. Circuit Court of Appeals, based in Boston, sided with the U.S. Department of Justice, endorsing a prior ruling by a trial judge that had forbidden the airlines’ collaboration known as the “Northeast Alliance.” This alliance permitted the two airlines to synchronize flights and share revenues.

Judge William Kayatta, part of the three-judge panel, stated that the trial court encountered an arrangement bearing nearly all characteristics of a partnership between two major competitors, concentrating on revenue sharing and dividing highly competitive markets.

He noted that Judge Leo Sorokin, after conducting a non-jury trial, made a ruling in May 2023 with comprehensive fact-finding that included several key points unfavorable to American Airlines, and did not reveal any significant legal misinterpretations.

U.S. Attorney General Merrick Garland remarked that this ruling represents “a hard-won victory for millions of Americans who rely on airline competition to travel affordably, whether for family visits, vacations, or business purposes.”

American Airlines, headquartered in Fort Worth, Texas, expressed disagreement with the ruling and is exploring its options, which may involve requesting the 1st Circuit to reconsider their decision or appealing to the U.S. Supreme Court.

American Airlines argued that the Northeast Alliance was intended to enhance competition and broaden customer choices in the Northeast, which it successfully did during its operational period.

This alliance, initiated in July 2020, received approval from the U.S. Transportation Department right before the close of Donald Trump’s first term in January 2021.

The new administration led by Trump is anticipated to welcome more mergers and partnerships compared to the previous administration of Joe Biden, whose Justice Department moved to block the alliance in September 2021 alongside six states.

Through their cooperation, American, the largest airline in the U.S., and JetBlue, the sixth largest, worked together on flights in and out of New York City and Boston by coordinating their schedules and sharing revenue.

The Justice Department stated that this cooperation would have adverse effects on customers, noting that it diminished American Airlines’ motivation to reduce fares to attract passengers from JetBlue, a competitor known for its competitive pricing.

After Judge Sorokin’s ruling, JetBlue terminated the alliance as it failed to strengthen its position for approval of its proposed $3.8 billion merger with Spirit Airlines (SAVE.N), which was also contested by the Justice Department.

American Airlines, however, continued to pursue an appeal, arguing that the ruling could hinder the company from forming similar collaborations in the future, including with JetBlue.