Airlines

DOJ, 6 states file antitrust suit against American Airlines, JetBlue over northeast alliance

Key Points
  • The Department of Justice, six states and the District of Columbia on Tuesday sued American Airlines and JetBlue Airways over the carriers' alliance in the Northeast U.S., alleging it violates antitrust law and would drive up airfares.
  • American Airlines and JetBlue announced their northeast partnership in July 2020 and it was approved by the Transportation Department during the last weeks of the Trump Administration.
  • The so-called Northeast Alliance allows the two carriers to coordinate on schedules in the region but not fares.

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DOJ files anti-trust lawsuit against American and JetBlue Airlines

The Department of Justice, six states and the District of Columbia on Tuesday sued American Airlines and JetBlue Airways over the carriers' alliance in the Northeast U.S., alleging it violates antitrust law and would drive up airfares.

American and JetBlue announced the partnership in July 2020 and it was approved during the last weeks of the Trump administration. A condition of the approval was giving up certain slots in New York and Washington.

The so-called Northeast Alliance allows the carriers to coordinate schedules only in the region but they cannot coordinate airfares. The agreement aims to take on rivals at four airports in the New York City area and Boston, mostly United Airlines and Delta Air Lines. JetBlue and American have argued the partnership would allow them to expand service in congested airports.

"By consolidating their businesses in this way, American and JetBlue will effectively merge their operations on flights to and from the four airports—which collectively account for two thirds of JetBlue's business," said the lawsuit.

The agreement also allows American and JetBlue to sell each others' flights to and from the region and gives customers the option of earning and burning frequent flyer miles on each carrier.

But the lawsuit, filed in federal court in Massachusetts, alleges the partnership violates antitrust law and would hurt consumers beyond the Northeast.

"By effectively absorbing JetBlue's operations in Boston and New York City, American can reduce investments not just in those cities, but also in other parts of its network where it otherwise would maintain or add service," the suit said. "As a consequence, consumers across the country will have fewer options and pay higher fares."

JetBlue and American denied the allegations. American pointed to 58 new routes and code-share, which allows airlines to sell one another's flights, on 175 routes under the agreement.

"NEA brings an unprecedented ability to grow in New York, grow quickly and bring more low fares to more places," said JetBlue CEO Robin Hayes.

"We are extremely confident that the facts are on our side, that the DOJ doesn't really have much evidence to support what they're saying and that we will prevail in court," Hayes said.

American said in a statement that the lawsuit would "inhibit" competition.

"This is not a merger: American and JetBlue are – and will remain – independent airlines," it said. "We look forward to vigorously rebutting the DOJ's claims and proving the many benefits the Northeast Alliance brings to consumers."

The suit was brought by the U.S., Arizona, California, Florida, Massachusetts, Pennsylvania, Virginia and the District of Columbia.