The Department of Justice claims that the so-called “Northeast Alliance” between American Airlines and JetBlue is detrimental to consumer choice.
A federal antitrust lawsuit challenging a recently former partnership between American Airlines and JetBlue will be heard in a Boston-area court today.
According to NBC-10Boston, American Airlines and JetBlue formed the so-called “Northeast Alliance” in 2020.
At the time, the airlines said that they hoped a partnership could improve options and prices for passengers in New York and Boston.
Under the terms of the “Alliance,” American Airlines and JetBlue share planning on which routes to fly, when to fly them, and which aircraft to use. Additionally, the carriers also share gates, take-off slots, and landing spaces.
However, the United States Department of Justice—along with a coalition of state attorneys general—have since claimed that the partnership has the potential to stifle competition and, to an extent, raise consumer airfare prices.
When the Department of Justice filed its lawsuit last year, Attorney General Merrick Garland characterized increased cooperation between JetBlue and American Airlines as an “unprecedented maneuver” that could lead to higher fares, fewer choices, and poor service.
The agency’s top antitrust official, Assistant Attorney General Jonathon Kanter, has made similar statements before the Senate.
Speaking to a Senate subcommittee last week, Kanter said that, when new airlines began entering the industry before the pandemic, travelers benefited from competition.
However, Kanter said that an increase in airline mergers have effectively returned the market to its status quo, much to the detriment of individual flyers.
“We remain committed to fighting airline concentration when it breaks the law,” Kanter said. “We are looking very carefully at our approach to airline consolidation […] we have numerous other matters under review.”
JetBlue has, for instance, already proposed purchasing Spirit Airlines, an international budget carrier that primarily services destinations in the United States, Canada, and Latin America, for over $8 billion.
Nevertheless, representatives for the airlines say they look forward to addressing the Justice Department’s allegations in court, claiming that airline partnerships are good for consumers.
“They are wrong, and we’ll prove it,” then-American Airlines C.E.O. Doug Parker said shortly after the agency filed its antitrust lawsuit. According to Parker, interfering with the alliance could “take away consumer choice and inhibit competition, not encourage it.”
Some legislators, however, appear sympathetic to the Justice Department’s argument.
“Americans are beyond furious about cancellations and delays by airlines, and they are beginning to understand that the reason why airlines mistreat them and why they are mismanaged is because of consolidation,” Sen. Richard Blumenthal (D-CT) said last week.
Sources
Antitrust Lawsuit Against American Airlines, JetBlue Heads to Court in Boston
US case against American Airlines and JetBlue heads to court
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