DOJ filed an anti-trust suit challenging the American Airlines-JetBlue alliance

Sep 21, 2021

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

The Department of Justice filed an anti-trust lawsuit against the alliance between American Airlines and JetBlue.

Initial reports of the impending suit came amid increasing signs that the venture, dubbed the Northeast Alliance by the two airlines, would face challenges from the Justice Department.

Want more airline-specific news? Sign up for TPG’s free new biweekly Aviation newsletter!

In July, President Joseph Biden signed an executive order calling for increased competition across a range of sectors to counter increased consolidation over recent decades, “in order to promote the interests of American workers, businesses, and consumers.”

On Friday, Sen. Richard Blumenthal (D-CT) wrote a letter to the Department of Transportation complaining that the partnership amounted to anti-competitive coordination between the two carriers.

“I write with grave concerns that the recent joint partnership between American Airlines and JetBlue Airways will lead to anticompetitive coordination at key air traffic hubs and result in the long-term inflation of airfares and related costs for airline passengers,” Blumenthal wrote. “I urge the Department of Transportation to conduct a full public interest review and investigation of the Northeast Alliance cooperative agreement—consistent with President Biden’s recent Executive Order on Competition—before taking any further action on merits of this venture.”

Also on Friday, the Federal Aviation Administration (FAA) said it would award 16 available slots at Newark Liberty International Airport (EWR) to a low-cost carrier, citing the executive order and an effort to increase competition.

“The Department of Justice applauds the Department of Transportation’s efforts to preserve competition from low-cost airlines at Newark airport,” acting assistant attorney general Richard Powers said in a statement in support of the FAA. “Competition in the airline industry – and at Newark airport in particular – is in critically short supply.”

American and JetBlue announced the alliance in July 2020, saying it would collectively allow them to better compete against Delta and United by codesharing on some routes and offering reciprocal frequent flyer benefits. Notably in New York, United and Delta are entrenched as dominant players at the city’s capacity-controlled airports. American and JetBlue say their alliance allows them to compete at scale there, where expansion is hindered by the government’s slot and capacity restrictions.

Questions about whether it violated anti-trust regulations emerged almost immediately following the airlines’ announcement, and emerged again in recent weeks following the Biden Administration’s executive order, which specifically noted airlines as a sector to be addressed.

The alliance had received approval in the last days of the Trump Administration after the airlines agreed to forfeit several slots in New York and Washington, and to avoid coordinating fares or revenue management.

The airlines implemented the alliance earlier this year, adding new routes and allowing users of both airlines’ loyalty programs to earn miles on each other’s flights.

The airlines have added nearly 60 routes under the alliance, while JetBlue has said that it has hired more than 1,800 workers to support it. The carriers have said that pressure from the alliance has led other carriers to lower fares.

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

Hayes added that he does not think the alliance is anti-competitive.

More: FAA will offer Newark slots to low-cost airline, spurring competition for United

“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.”

It was not immediately clear what the pending suit would mean for passengers, or whether the airlines would continue to roll out reciprocal benefits for their respective loyalty programs.

Featured photo by NYC Russ / Shutterstock.com

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
$250
Balance Transfer Fee
N/A
Recommended Credit
Excellent/Good
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.