The Justice Department filed an antitrust suit against American Airlines and JetBlue, saying a growing alliance between the two carriers had created a “de facto merger” in the New York and Boston markets, reducing competition and hurting consumers, The New York Times reported. The suit said the arrangement between the airlines reduced the incentive for them to compete in the Northeast and elsewhere and would “cause hundreds of millions of dollars in harm to air passengers across the country through higher fares and reduced choice.” “This sweeping partnership is unprecedented among domestic airlines and amounts to a de facto merger,” the Justice Department declared. It said attorneys general in six states and the District of Columbia were joining in the lawsuit. The action is the latest effort by the Biden administration to increase competition and limit the power of large companies through antitrust actions. But it comes as airlines are trying to right themselves after the pandemic crushed their revenue and profits. And the two airlines rejected the lawsuit’s premise, contending that their partnership in fact helps increase competition against Delta Air Lines and United Airlines and in New York airports. “Ironically, the Department of Justice’s lawsuit seeks to take away consumer choice and inhibit competition, not encourage it,” Doug Parker, American’s chief executive, said in a statement. The Transportation Department signed off on the alliance in January, just before President Biden took office. Under this agreement, the airlines agreed to conditions aimed at ensuring that the carriers did not behave in an anticompetitive manner. The Justice Department complaint contends that the alliance combines the airlines’ operations at the three main airports serving New York and at Logan International in Boston. It said the airlines had committed to coordinate “on all aspects” of network planning, including routes, schedules and aircraft; to pool their gates and takeoff and landing authorizations, known as slots; and to share revenues earned at those airports — arrangements that it said would raise prices and reduce choices. The Justice Department’s central argument is that the alliance will prevent JetBlue from bringing the sort of fierce competition to New York airports that is said to have led to big savings for travelers at other airports.
