US Sues To Block Deal Between American Airlines And JetBlue
On Tuesday, the US Justice Department and six states filed an antitrust lawsuit against American Airlines Group Inc and JetBlue Airways Corp in an attempt to stop a partnership that the government says could lead to higher fares in the Northeast’s busiest airports.
The lawsuit asks a federal court in Boston to block the “Northeast Alliance” partnership which was announced in July 2020 following its approval by the US Transportation Department. The suit takes aim at American Airlines, arguing that the alliance would dramatically increase prices for consumers.
Both American Airlines and JetBlue have said they will contest the suit which comes as an especially big blow to the airlines at a time when the pandemic has caused sales to plummet and the future of air travel remains unclear.
Robin Hayes, CEO of JetBlue, argues that the “Northeast Alliance” has actually resulted in lower fares in the Northeast. However, the Justice Department has said that the alliance would create a de facto merger in the Northeast and combine the airlines’ operations at Boston Logan, John F. Kennedy, LaGuardia, and Newark Liberty — all of which are major airports in the region.
The lawsuit signals the Biden administration’s interest in injecting greater competition where American Airlines, alongside three other major airlines, control 80% of the domestic air market.