The U.S. Department of Justice will file a lawsuit to challenge American Airlines and JetBlue’s partnership on antitrust grounds, The Wall Street Journal reported on Tuesday.
The carriers’ Northeast Alliance in January received approval from the U.S. Department of Transportation with some concessions, including a requirement to divest some slots at Washington Reagan National and New York’s John F. Kennedy airports. This was during the Trump Administration’s final days. However, the Biden administration operates under an executive order from earlier in summer that “promotes competition in America’s economy.” The Wall Street Journal reports that this lawsuit could claim that the alliance can harm competition and cause higher fares.
According to reports, The Wall Street Journal reported that the suit could begin as soon as Tuesday.
American Airlines responded to the claims that their alliance was anticompetitive in a statement it provided to BTN. Since February, the alliance has resulted in 58 new routes out of JFK, LaGuardia, Boston and Newark and 18 new international routes that either have launched or will start by 2022.
“[The alliance is] American Airlines stated that the alliance is already offering more options and better customer service with code sharing, new domestic and international routes, improved schedules, and increased frequent flyer program benefits. The lawsuit is also encouraging other regional carriers to respond by offering better products and more services. It has clearly benefited consumers.
It would be the second lawsuit in the last week that shows the Biden administration is ready to embrace a tough approach when it comes to airline competition. U.S. According to Polly Trottenberg, DOT published a notice stating that they plan to find a low-cost/ultra-low-cost carrier in order to provide 16 slots for Newark’s peak hours. This will “provide air travellers with more options and lower prices.”
The department also plans to develop rules that will allow passengers to exercise their rights and increase transparency about ancillary charges.