American Airlines and JetBlue entered into what they called ‘the Northeast Alliance’ in order to become more competitive against larger rivals in key markets. As the number three and four carriers in New York, neither were large enough to be really competitive with United and Delta. But slot restrictions and gate availability meant that neither could grow. This was their solution to create a third real competitive alternative.
The government just won at trial to break up the alliance. The judge permanently enjoined this partnership from continuing and from further implementation, beginning in 30 days. One expects an appeal.