American Airlines and JetBlue sued by DOJ over their airline alliance
“The department cannot allow American Airlines to further consolidate the airline industry where competition is already in a critical shortage,” Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division told reporters.
“Consumers will be better off if American and JetBlue continue to be fierce competitors, not allies,” Powers said.
The DOJ indicated the two airlines also allegedly shared revenues earned at these airports, eliminating their incentives to compete with one another. In addition, the “Northeast Alliance” allowed the parties to pool their gates and takeoff and landing authorizations, known as “slots,” according to the DOJ.
An attorney for American Airlines told CNN that the carrier “feels confident” that the case does not provide evidence as to how the alliance is harming consumers.
“This is not at all like a merger with American — we have two different business models and are not working together on pricing,” he said. “It’s also important that you have the full picture on benefits the [Northeast Alliance] is already delivering, and I want to reassure you that the DOJ’s action will not affect our plans to continue implementing the [Northeast Alliance].”
According to the DOJ, the airlines’ alliance will cause hundreds of millions of dollars in harm to air passengers across the country through higher fares and reduced choice.
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