DOJ sues to block JetBlue-American Airlines partnership
The Justice Department on Tuesday filed a lawsuit to block an alliance between American Airlines and JetBlue, criticizing it as a “de facto merger” that reduces competition.
The antitrust lawsuit seeks to undo the airlines’ partnership to share flights at New York and Boston airports and allow customers to book tickets and earn rewards with either airline.
“In an industry where just four airlines control more than 80 percent 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,” Attorney General Merrick Garland said in a statement.
The Justice Department alleged that the alliance will cause hundreds of millions of dollars in harm to air passengers through higher fares and fewer choices. Officials said that under the partnership, in which JetBlue and American Airlines share revenue, the airlines no longer have any reason to compete with each other.
The Department of Transportation approved the partnership in the final days of the Trump administration, but it quickly drew scrutiny from Biden administration officials.
The lawsuit comes after President Biden specifically named the airline industry as being too heavily concentrated in a July executive order to crack down on anti-competitive practices.
The airlines have argued that the partnership was needed to create a third competitor to Delta Air Lines and United Airlines in the Northeast.
In an interview with Washington Post Live on Tuesday, American Airlines CEO Doug Parker said the carrier will “vigorously defend” its partnership, calling it “pro-competitive.”
“We and JetBlue are putting our networks together to provide more choice to consumers, to increase competition, particularly in the Northeast, in New York and Boston, where American doesn’t have as big a presence as Delta and United,” he said.
Attorneys general in six states and Washington, D.C., joined the Justice Department lawsuit, which was filed in the U.S. District Court in Massachusetts.