American faces a JetBlue lawsuit in the United States. American Airlines and JetBlue have been sued by the US Justice Department for antitrust violations.
The government agency said that the two carriers’ expanding collaboration had resulted in a “de facto merger” in the New York and Boston markets, decreasing competition and harming consumers.
According to the lawsuit, the two carriers’ agreement has limited their incentive to compete in the northeast of the United States and internationally.
According to a statement, the agreement could “cause hundreds of millions of dollars in harm to fly customers across the country through higher tickets and reduced choice.”
The Justice Department concluded, “This broad alliance is unparalleled among domestic airlines and amounts to a de facto merger.”
Attorneys general from six states and the District of Columbia have joined the lawsuit, according to the statement.
The move is considered the latest antitrust measure was taken by the Biden administration to boost competition and limit the influence of huge corporations.
The collaboration was approved by the Transportation Department in January, just before President Biden entered office.
The airlines agreed to terms in this agreement to ensure that they did not engage in anticompetitive behaviour.
According to the Justice Department’s complaint, the alliance incorporates the airlines’ operations at New York’s three principal airports — Kennedy International, La Guardia, and Newark Liberty — as well as Boston’s Logan International.
The airlines agreed to collaborate “on all aspects” of network planning, including routes, schedules, and aircraft; pool their gates and take-off and landing authorizations, known as slots; and split income collected at certain airports, according to the statement.
According to the department, these arrangements would boost prices and limit options.
The main argument is that the partnership will prevent JetBlue from introducing the kind of tough competition to New York airports that has allegedly resulted in significant savings for passengers at other airports.
The American Reaction
In a statement, American Airlines CEO Doug Parker claimed the accusation was without substance.
“Since January, the alliance has added 58 new routes, increased frequency on more than 130 routes, implemented code-sharing on 175 routes, and launched additional international flights to Tel Aviv, Athens, and Delhi for New York and Boston customers.
“The north-east alliance will offer more than 700 daily flights from New York and Boston this winter, delivering on its promise of growth, and will continue to invest to give consumers with a seamless experience.”
“Delta and United dominated the New York City market before the alliance,” he continued.
“In New York, the partnership has produced a third full-scale competitor, and it is enabling greater growth in Boston.
“Ironically, the Department of Justice’s action aims to limit consumer choice and competition rather than promote it.
“This is not a merger: American and JetBlue are independent airlines that will remain thus.
“We are eager to forcefully refute the accusations and demonstrate the many benefits the northeast alliance provides to consumers.”