DoJ Says JetBlue-American Alliance Will Be Costly for Consumers
The U.S. Justice Department (DoJ) has said that the new Northeast Alliance between American Airlines and JetBlue Airways will be bad news for travelers.
In the government’s bid to dissolve the partnership the DoJ, six states and the District of Columbia have called the “Northeast alliance “a “de facto merger” that will cost consumers an extra $700 million in annual costs.
U.S. District Judge Leo Sorokin in Boston plans to hold another hearing before he issues a decision in the antitrust lawsuit, Reuters reports.
The government says the alliance gives the airlines incentives to raise prices since they no longer compete against each other. Lawyers for JetBlue and American argued the alliance, first announced in 2020, has not raised air fares or resulted in flight cuts. They said it has has expanded flights and made them more competitive on northeast routes.
Executives of rivals Southwest Airlines and Spirit Airlines testified that the partnership has created unfair competition for low-cost carriers that also want to grow in New York and Boston.
The decision on this case will come down to the judge’s reading of antitrust law, and his judgment about whether the government presented enough evidence to end the partnership.
JetBlue is also in the process of buying Spirit Airlines for $3.8 billion. Spirit Airlines shareholders voted last month to approve the sale despite regulatory risk.