Join our daily newsletter At The Bell to receive exclusive market insights
- American Airlines and JetBlue have been sued by the United States Justice Department (DOJ) and six states over their partnership
- Announced in July 2020, the Northeast Alliance was created to allow both airlines to sell each other’s flights in the New York and Boston areas
- Additionally, it allows the companies to link frequent flyer programs in a bid to make them more competitive with the likes of Delta and United Airlines
- Both companies have vowed to fight the suit with an attorney from American claiming he “feels confident”there is no evidence as to how the alliance is harming competition
- According to the DOJ, this alliance will cause hundreds of millions of dollars in harm to air passengers across the United States
American Airlines and JetBlue have been sued by the United States Justice Department (DOJ) and six states regarding their partnership.
Announced in July 2020, the Northeast Alliance was created to allow American Airlines and JetBlue to sell each other’s flights in the New York and Boston areas.
Additionally, it allows the companies to link frequent flyer programs in a bid to make them more competitive with the likes of Delta Air Lines and United Airlines.
The Justice Department stated that the airlines committed to sharing information regarding what size planes to use for each flight, which routes to fly, when to fly them and who would fly them.
Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division told reporters it could not allow airlines to combine and further diminish competition.
“The department cannot allow American Airlines to further consolidate the airline industry where competition is already in a critical shortage,” he said.
“Consumers will be better off if American and JetBlue continue to be fierce competitors, not allies.”
California Attorney General Rob Bonta, whose state is one of the six involved in the lawsuit, commented on the partnership.
“Fewer flights. More expensive tickets. Lower quality service,” Attorney General Bonta said.
“Plain and simple: American Airlines and JetBlue’s Northeast Alliance is anticompetitive.”
Both American Airlines and JetBlue have vowed to fight the suit with an attorney from American Airlines telling CNN that it “feels confident” that there is no evidence as to how the alliance is harming consumers.
JetBlue CEO Robin Hayes said the company remained committed to the competition and low fares remain as strong as ever.
“This is not at all like a merger with American – we have two different business models and are not working together on pricing,” he said.
“It’s also important that you have the full picture on benefits the [Northeast Alliance] is already delivering, and I want to reassure you that the DOJ’s action will not affect our plans to continue implementing the [Northeast Alliance].”
According to the DOJ, this alliance will cause hundreds of millions of dollars in harm to air passengers across the US.
