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The Northeast Alliance on trial: JetBlue and American head to court in US antitrust suit

Sept. 27, 2022
3 min read
The Northeast Alliance on trial: JetBlue and American head to court in US antitrust suit
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The U.S. antitrust trial against the Northeast Alliance between JetBlue and American is slated to begin on Tuesday as the airlines seek to convince a judge that their unique partnership increases options for consumers and drives down prices.

The suit, filed by the Department of Justice last year, alleges that by codesharing and collaborating to run complementary route networks through New York and Boston, the alliance would "eliminate significant competition between American and JetBlue that has led to lower fares and higher quality service for consumers traveling to and from those airports."

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American and JetBlue, however, have been vociferous in their defense of the alliance, which it says allows them to offer stronger competition against Delta and United — which dominate the Northeast market — than either airline could do alone. While JetBlue has a strong presence in the Northeast, it remains relatively small and has less of a presence elsewhere in the country. While American remains large, its New York presence has shrunk significantly since the early 2000s, and it can't significantly add service due to slot restrictions in New York.

The airlines have argued that in the 18 months since the alliance began, the cost increases that the DOJ warned about in its initial complaint have failed to materialize. Additionally, the airlines said they have increased capacity in the Northeast region and "improved the quality of travel to and from Boston and New York" through "collaborative scheduling, codesharing, and frequent flyer program integration."

The two airlines announced the alliance in July 2020. While questions surrounding antitrust controls quickly emerged, the alliance received approval in the waning days of the Trump Administration after the airlines agreed to forfeit several slots in New York and Washington, D.C., and to avoid coordinating fares or revenue management.

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American Airlines aircraft on the ground at Boston Logan Airport in March, 2022.

Nevertheless, in July of last year, President Joe Biden signed an executive order calling for increased competition across a range of sectors to counter consolidation over recent decades, "in order to promote the interests of American workers, businesses, and consumers." The executive order specifically mentioned airlines, reignigting questions about whether the Alliance would be targeted by regulators. The suit was filed the following September.

The trial, which is set to take place in Boston District Court, is expected to take up to three weeks. Current and former executives of both airlines, including the CEOs of JetBlue and American, are expected to testify as witnesses.

Since the suit was filed, JetBlue separately reached a deal to acquire ultra-low-cost carrier Spirit Airlines, outbidding Frontier in an effort to acquire the Florida-based carrier.

That deal, which is also expected to be subjected to intense regulatory scrutiny, is still pending and consequently not expected to impact the Northeast Alliance trial or decision. Spirit, which initially favored Frontier's offer, had previously cited regulatory hurdles to a potential JetBlue deal.

TPG will be on-site at the trial this week, so be sure to check back for updates.

Featured image by DAVID SLOTNICK/TPG
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
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    670-850
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Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

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  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required.
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  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees