Boston, Massachusetts’ 1st Circuit Court of Appeals upheld on Friday that a lower court correctly ruled in an antitrust verdict against a partnership between American Airlines and JetBlue.

In 2020, the Northeast Alliance (NEA) – a seven-year joint venture between the two carriers – effectively allowed them to coordinate some routes and share revenue in Boston and New York.

The Department of Justice, joined by several states, filed suit to bar this from happening alleging that it violated the Sherman Act as an unreasonable restraint on competition.

The carriers began a dismantling of the NEA in May 2023 after a District Court judge ruled that the three-year-old alliance “substantially” diminished competition in the domestic airline market.

In Friday’s Circuit Court affirmation, Circuit Judge William Kayatta wrote that the size of American as one of the largest carriers in the world and JetBlue as the sixth largest in the U.S. causes concern for domestic cooperation.

“In terms of domestic cooperation among airlines, carriers in the United States historically have only engaged in small-scale arrangements, unlike the extensive cooperation between GNCs [global network carriers] and various international carriers to expand service to outlying destinations through commingled itineraries,” Kayatta stated in the court’s opinion filed Friday.

After reviewing the appeal made by American, Kayatta stated the carrier failed to convince the court of appeals that the district court’s original ruling committed clear factual errors in finding that the carriers didn’t justify the NEA’s restraints with evidence of procompetitive benefits.

“Presented with an arrangement that had many of the essential attributes of an agreement between two powerful competitors sharing revenues and divvying up highly concentrated markets, the district court conducted a monthlong proceeding, after which it made detailed findings of fact, many key ones of which were unfavorable to American,” Kayatta stated. “Seeing no clear error in those findings, we also see no error of law in the court’s application of the rule of reason to conclude that the arrangement violated section one of the Sherman Act.”

American Airlines told Bloomberg in an emailed statement that it is reviewing the ruling and considering options.

“The Northeast Alliance was designed to increase competition and expand customer options in the Northeast, which it clearly did during the time it was allowed to operate,” the carrier said.