A partnership between
The alliance, which allows the companies to share routes, bookings and passengers in the US Northeast, ends the rivalry in Boston and New York between American, the country’s largest carrier, and JetBlue, allowing the two to act “like a single airline at the expense of travelers,” the government argued.
It is “a merger in all but name,” William Jones II, an attorney for the Justice Department, said during opening statements in Boston. The two airlines are “now collaborators instead of competitors,” he told US District Judge
This trial is the latest in the Justice Department’s renewed trust-busting efforts and represents the first challenge the government has brought against an airline since 2013, when it sued to block the $17.2 billion merger of AMR Corp., then parent of American Airlines, and
This is “a highly pro-competitive partnership that already has delivered substantial benefits to consumers,” he said.
The Justice Department, along with attorneys general from six states and Washington, DC, sued September 2021 to challenge the agreement, which the airlines have been operating since early 2021. The government alleges the alliance has resulted in a “de-facto merger” at four airports in Boston, New York and Newark, New Jersey, allowing the pair to control as much as 96% of the market on some routes. Economic experts for the government estimate that airline passengers will pay $700 million annually in higher fares because of the alliance, Jones said.
The most harm will be in 29 nonstop markets between Boston and the New York area, which carry about 32 million passengers each year, he said.
The government alleges the Northeast Alliance allows American to expand its routes by essentially capturing those of smaller rival JetBlue. Jones said that JetBlue’s proposed deal to buy
Schwed, the JetBlue attorney, said the alliance created “one relevant competitor out of two weak ones.” Before the partnership,
The alliance lets the two airlines pool airport slots and gates, and offer reciprocal frequent-flier benefits and code-sharing, which allows them to book on each other’s flights. American and JetBlue don’t coordinate on pricing, fleet plans or overall capacity, Schwed said. He also rejected the DOJ’s contentions on the Spirit deal.
“The Spirit acquisition has absolutely nothing to do with this case,” he said.
“This case has come to trial with no evidence of actual adverse effects,” Wall said.
Airline executives from JetBlue and
The case is US v American Airlines, 21-cv-11558, District of Massachusetts (Boston).
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