DOJ Files Suit to Block American-JetBlue Alliance

The alliance agreement between American Airlines and JetBlue Airways, announced more than a year ago, is suddenly under more than just scrutiny – it’s the subject of a lawsuit.

Saying that such a deal between the two carriers would eliminate competition and drive up the cost of airfares, particularly in New York and Boston, the Department of Justice along with six states and the District of Columbia filed an antitrust lawsuit to block the partnership.

The alliance, primarily in the Northeast, was announced in July of 2020 and approved in the final weeks of the Trump administration, according to CNBC.

Almost immediately after the alliance was signed off by the Trump White House, it came under scrutiny.

The deal allows the carriers to coordinate schedules only in the region but they cannot coordinate airfares. The agreement aims to take on rivals at four airports in the New York City area and Boston – both cities a hub for JetBlue.
“By consolidating their businesses in this way, American and JetBlue will effectively merge their operations on flights to and from the four airports—which collectively account for two thirds of JetBlue’s business,” part of the lawsuit read.

The agreement also allows American and JetBlue to sell each others’ flights to and from the region and gives customers the option of earning and burning frequent flyer miles on each carrier.

The suit, filed in federal court in Massachusetts, alleges the partnership violates antitrust law and would hurt consumers beyond the Northeast.

“By effectively absorbing JetBlue’s operations in Boston and New York City, American can reduce investments not just in those cities, but also in other parts of its network where it otherwise would maintain or add service,” the suit said. “As a consequence, consumers across the country will have fewer options and pay higher fares.”

American pointed to 58 new routes and codeshare agreements, which allows airlines to sell one another’s flights, on 175 routes under the alliance.

“This is not a merger: American and JetBlue are – and will remain – independent airlines,” American Airlines said in a statement. “We look forward to vigorously rebutting the DOJ’s claims and proving the many benefits the Northeast Alliance brings to consumers.”

“(The Northeast Alliance) brings an unprecedented ability to grow in New York, grow quickly and bring more low fares to more places,” JetBlue CEO Robin Hayes said in a statement. “We are extremely confident that the facts are on our side, that the DOJ doesn’t really have much evidence to support what they’re saying and that we will prevail in court.”

The suit was brought by the U.S., Arizona, California, Florida, Massachusetts, Pennsylvania, Virginia and the District of Columbia.