American Airlines, JetBlue go to court in antitrust battle
Federal antitrust lawyers are going to court Tuesday against American Airlines and JetBlue Airways to challenge a joint venture that the government alleges amounts to an illegal merger in all but name.
The trial, which is expected to last until mid-October, will determine the future of the partnership between American and JetBlue, which allows the airlines to share flights and customers. This may also affect the proposed $3.8 billion acquisition of Spirit Airlines, which must be approved by antitrust authorities before becoming final, Bloomberg reported.
→ American Airlines Introduces New Flagship Suite Seats.
It is the first challenge by an airline association in the U.S. since President Joe Biden in July 2021 singled out the sector as one that has reduced competition for consolidation.
The Justice Department is under pressure to have something to show for its trust-busting efforts after the collapse last week of two of its cases, one targeting UnitedHealth Group Inc.’s $7.8 billion acquisition of Change Healthcare Inc. and a second between two of the largest U.S. sugar refiners.
The heightened scrutiny follows years in which federal regulators routinely approved airline consolidation, aided by a series of bankruptcies, that eliminated five of the 10 largest airlines between 2005 and 2013. Concerns about over-control in some markets have mostly been resolved through agreements to eliminate gates or flight slots at congested airports.
→ JetBlue inaugurates flights between Boston and London Gatwick.
Under American and JetBlue’s Northeast Alliance, the airlines have a codeshare agreement that allows them to book each other’s flights and offer some reciprocal frequent flyer program benefits. Passengers can use either carrier’s website to purchase a single itinerary that includes flights on both airlines. The airlines say they have added 50 new routes they did not previously fly in the 18 months the alliance has been in operation, and have increased frequencies on another 130 routes.
The Department of Transportation ended its review of the alliance in January 2021, during the final days of the Trump administration, after American and JetBlue agreed to sell or lease some slots at Washington’s John F. Kennedy and Ronald Reagan International airports. The two airlines are still working with the department on those divestitures, American said.
The Justice Department and attorneys general in six states allege that the partnership allows American, the largest U.S. airline, to take over rival JetBlue. The joint venture between the airlines will cost consumers hundreds of millions in higher fares each year, especially on flights to and from New York City and Boston, where the carriers account for more than 50% of flights on dozens of routes, according to the department.
Related Topics
Istanbul Sets a Milestone: First Airport in Europe with Simultaneous Operations on Three Independent Runways
Madrid-Barajas Airport Surpasses 5.5 Million Passengers in March
SAS Reintroduces Its European Business Class with a Clear Focus on the Premium Traveler
Wizz Air UK Delays Entry into Service of Airbus A321XLR Again
Plataforma Informativa de Aviación Comercial líder en América Latina.