US DOJ pushes for American, Jetblue anti-trust suit

The United States Department of Justice (DOJ) has told a judge to reject a bid by American Airlines (AA, Dallas/Fort Worth) and JetBlue Airways (B6, New York JFK) to have an antitrust lawsuit over their “Northeast Alliance” dismissed, Reuters reports.

The partnership was announced in July 2020 and approved by the US Transportation Department (DOT) shortly before the end of the Trump administration.

However, in September 2021, the US Department of Justice (DOJ), together with Attorneys General in six states (Arizona, California, Florida, Massachusetts, Pennsylvania, and Virginia) and the District of Columbia, sued in the District of Massachusetts to block agreements between American Airlines and JetBlue through which they would consolidate their operations in Boston and New York City, including codeshares and linking their frequent-flyer programmes. They claimed the proposed Northeast Alliance would not only eliminate important competition in these cities but also harm air travellers across the US by “significantly diminishing JetBlue’s incentive to compete with American elsewhere, further consolidating an already highly concentrated industry”.

The airlines in November 2021 had filed a motion in the US District Court in Boston to dismiss the lawsuit arguing their partnership was not a merger and that the DOJ lacked proof of its market-wide anti-competitive impact.

As reported, American Airlines Chairman and Chief Executive Officer Doug Parker had called the lawsuit “misguided”, saying the airline looked forward to “vigorously rebutting the DOJ’s claims and proving the many benefits the NEA brings to consumers”.

However, the appellants in a court filing on December 13 said the proposed alliance “seeks to accomplish through a joint venture what would not be tolerated as a merger: eliminating significant competition between a dominant airline and a uniquely disruptive competitor […] instead of fighting with JetBlue, American now seeks to co-opt it”. They argued that “at a minimum” the airlines’ proposal “should be tested through discovery and trial”.