The United States Department of Justice (DOJ) this week filed a lawsuit in an attempt to block the partnership formed by American Airlines and JetBlue.
The partnership, which had already been approved by the Department of Transportation (DOT), would have given the two carriers codeshare rights on flights in the New York and Boston areas—American would have added its code on more than 10 JetBlue routes while JetBlue would have done the same on 60 American Airlines routes.
According to the DOJ, the partnership would go too far in eliminating competition in New York and Boston and would deter the two from competing against each other in other areas of the country.
According to Attorney General Merrick Garland, just four carriers control more than 80% of domestic air travel within the U.S., and the alliance, if approved, would have been “an unprecedented maneuver to further consolidate the industry” and would have resulted “in higher fares, fewer choices, and lower quality service if allowed to continue.”
Both carriers have promised to fight the DOJ in court in order to move ahead with the partnership.
In a statement, American pushed back against the notion that the partnership would harm competition, writing that, at the moment, the New York market is dominated by two other carriers (Delta and United) and the agreement would have “created a third, full-scale competition in New York” while empowering more growth in Boston.”
“This is not a merger: American and JetBlue are – and will remain – independent airlines,” American CEO Doug Parker said. “We look forward to vigorously rebutting the DOJ’s claims and proving the many benefits the Northeast Alliance brings to consumers.”
When they originally announced their intent to sign on to the deal, the carriers said the alliance “will accelerate each airline’s recovery from the pandemic as customers are attracted to the expansion of options and enhanced service.”
Both American and JetBlue had made concessions as part of the DOT review. Both signed on to growth commitments to ensure capacity expansion, slot divestitures at JFK and at Washington, D.C.’s Reagan National Airport (DCA), and antitrust compliance measures.
Both said they would also be refraining from certain kinds of coordination in city-pair markets where they are substantial competitors to each other, such as South Florida.