American and JetBlue strike back against DOJ complaint over Northeast alliance

Sep 21, 2021

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American Airlines CEO Doug Parker vociferously defended his airline’s partnership with JetBlue on Tuesday, pushing back against the merits of a pending Justice Department anti-trust lawsuit.

“They’re wrong and we’ll prove it,” Parker said in a live-streamed Q&A with the Washington Post. “It’s entirely pro-competitive.”

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News of the anti-trust suit comes following renewed scrutiny on the so-called “Northeast Alliance,” in which American and JetBlue codeshare on some routes and share reciprocal benefits to members of each other’s frequent flyer programs.

Parker argued that the alliance allows the two airlines to compete against Delta and United, which are largely entrenched in the Northeast market, while American and JetBlue would otherwise not be able to mount enough of an offense on their own.

“By putting our networks together, we give more choice to consumers,” he said. “It’s already working.”

Parker said that the alliance, with JetBlue feeding domestic passengers into Boston and New York-JFK, where they can connect on American, meant that routes that otherwise would not be viable — given American’s relatively weak network into the New York market and JetBlue’s limited access to new slots — can potentially thrive.

“We’ve already increased frequencies to new communities,” he said. “American Airlines announced our intent to fly international routes that we never would’ve flown without this Northeast Alliance, places like Tel Aviv, Delhi, and Athens out of JFK.”

The alliance was approved in the final days of the Trump administration but has since been subjected to ongoing scrutiny.

In a statement issued later on Tuesday, Parker emphasized the argument that the alliance facilitates more competition in the Northeast, not less.

“Before the alliance, Delta and United dominated the New York City market,” Parker said. “The NEA has created a third, full-scale competitor in New York and is empowering more growth in Boston. Ironically, the Department of Justice’s lawsuit seeks to take away consumer choice and inhibit competition, not encourage it.”

JetBlue CEO Robin Hayes, speaking in an interview with Bloomberg on Monday about a potential suit, similarly argued that the alliance is a benefit to customers, rather than an anti-competitive move.

“We don’t believe there is any case,” Hayes said. “We believe the overwhelming evidence is already pointing to more JetBlue routes, more low fares, more choice. Rather than DOJ looking at that they should continue to monitor and make sure those benefits continue to be delivered.”

“This has been the biggest catalyst of growth JetBlue has had since we were created,” Hayes added. “The ability to quadruple flights at LaGuardia, add flights at JFK and Newark. None of that would have been possible without the NEA.”

A spokesperson for JetBlue said the airline planned to hire 1,800 additional employees as a direct result of the capacity expansion enabled by the alliance.

In a memo to employees on Tuesday, Hayes said that the airline was fully confident in the legality and viability of the alliance.

More: DOJ plans to challenge the American Airlines-JetBlue alliance

“Regardless of what the DOJ claims about us in court and in the media, it’s important you know that JetBlue’s commitment to competition and low fares remains as strong as ever,” he wrote. “I want to reassure you that the DOJ’s action will not affect our plans to continue implementing the NEA.”

Featured image by Joe Raedle/Staff/Getty Images

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