American Airlines and JetBlue sued by DOJ for airline alliance

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JetBlue (JBLU) and American Airlines (AAL) last year created the “Northeast Alliance” which operates out of four major airports in Boston and New York. The DOJ said the two companies are committed to sharing information about which routes to take, when to fly them, who will fly them and what size aircraft to use for each flight.

“The ministry cannot allow American Airlines to further consolidate the airline industry where competition is already in critical shortage,” Acting Deputy Attorney General Richard A. Powers of the Department’s Antitrust Division told reporters. Justice.

American Airlines is the largest airline in the world which, with Delta (OF), United (UAL) and South West (LCV), collectively controls more than 80% of domestic air travel, according to the DOJ. Prior to the alliance, JetBlue challenged American Airlines at airports in the Northeast.

“Consumers will be better off if American and JetBlue continue to be fierce competitors, not allies,” said Powers.

The DOJ said the two airlines would also share the revenue earned at these airports, thereby removing their incentives to compete. In addition, the “Northeast Alliance” allowed the parties to pool their doors and take-off and landing clearances, known as “slots,” according to the DOJ.

An American Airlines lawyer told CNN the carrier “is convinced” the case does not provide evidence of how the alliance is harming consumers.

JetBlue CEO Robin Hayes said on Tuesday that “the company’s commitment to competition and low fares remains as strong as ever.”

“It’s not like a merger with American at all – we have two different business models and don’t work together on pricing,” he said. “It is also important that you have a complete picture of the benefits that [Northeast Alliance] is already up to the task, and I want to assure you that the DOJ’s action will not affect our plans to continue implementing the [Northeast Alliance]. “

According to the DOJ, the airline alliance will cause hundreds of millions of dollars in damage to air passengers across the country due to higher fares and reduced choice.

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