Justice Department, 6 states oppose American Airlines-JetBlue alliance
- The lawsuit was filed in federal district court in Massachusetts
- Attorney General Merrick Garland said the lawsuit was about ensuring fair competition
- American Airlines and JetBlue have said that they will fight the lawsuit
The Justice Department, along with six US states, has filed a lawsuit to block a partnership between American Airlines and JetBlue. The DOJ has claimed that the proposed partnership will reduce competition in the airline sector and lead to higher fares for the customers.
The lawsuit was filed in federal district court in Massachusetts. The department was joined by the attorneys general of California, Massachusetts, Florida, Pennsylvania, Virginia, Arizona, and the District of Columbia.
The Justice Department said on Tuesday that the agreement will eliminate important competition in Boston and New York and reduce JetBlue's incentive to compete against American Airlines in other parts of the country, the Associated Press reported.
Attorney General Merrick Garland said the lawsuit was about ensuring fair competition that lets Americans fly at affordable prices.
"In an industry where just four airlines control more than 80% of domestic air travel, American Airlines' 'alliance' with JetBlue is, in fact, an unprecedented maneuver to further consolidate the industry. It would result in higher fares, fewer choices, and lower quality service if allowed to continue," Garland was quoted by the Associated Press as saying.
Both the airlines have said that they will fight the lawsuit.
The airlines announced their deal last year and have already started to coordinate their flights in the Northeast. According to the companies, it is a pro-consumer arrangement that has already helped them add several dozen new routes.
The lawsuit comes two months after President Joe Biden issued an executive order calling on government agencies to help consumers by increasing competition in the airline industry and other parts of the economy.
The agreement was approved with certain conditions by the Transportation Department in the final days of the Donald Trump administration. However, antitrust lawyers at the Justice Department began examining the deal more closely this spring and requested interviews and documents from the airlines, according to an airline lawyer involved in the case.
In the last three weeks it became apparent that the Justice Department was likely to file a lawsuit, said the attorney, who spoke on condition of anonymity because discussions with the regulators were private.
The airlines call their partnership the Northeast Alliance or NEA. It lets American and JetBlue sell seats on each other's flights and give customers reciprocal benefits in the separate frequent-flyer programs.
The airlines say that the Justice Department has no evidence that their agreement is leading to higher fares. Air-travel prices have been hurt by the pandemic, which continues to cut into travel demand and push fares lower.
American and JetBlue argue that nothing in their deal controls pricing, and that each airline will continue to set its own fares.
Southwest Airlines and Spirit Airlines filed formal complaints against the American-JetBlue alliance, however, arguing that — along with a similar deal on the West Coast between American and Alaska Airlines — it will make American too big.
(With inputs from the Associated Press)