American Airlines and JetBlue face antitrust lawsuit for Alliance
In an interview, Robin Hayes, managing director of JetBlue, said that this argument was “completely wrong”. He said the alliance with American allows JetBlue to dramatically increase the number of flights to New York airports. “JetBlue has never been able to add so many new flights in such a short time to New York,” he said.
Business and Economy
Some airline analysts said the situation at New York’s airports made the alliance necessary for JetBlue. With the number of flights serving the airports being strictly limited, JetBlue could not simply enter the market and offer new flights. Instead, he had to use American-owned slot machines, which was made possible by the alliance. At the same time, airlines have said they will use bigger planes for their flights and add new routes, resulting in more seating and possibly lower fares.
“When you increase the number of seats in the market, by keeping demand constant, you expect prices to come down,” said Gary Leff, who writes the Viewfromthewing.com travel blog.
But the Justice Department complaint says American has the upper hand in the alliance and could use its established position at New York City airports to reward or punish JetBlue, dampening competition.
“JetBlue will be indebted to its larger partner, which will lead to a significant decrease in competition in an industry in which competition is already extremely scarce,” said the Department of Justice.
When asked if the alliance has ever led to lower fares, Mr Hayes, the managing director of JetBlue, said: “It is obviously early,” but added: “As we announce these routes , you will see fares lower than they were before JetBlue arrived. “
The Justice Department has said it wants to reinvigorate antitrust enforcement, in line with the Biden administration’s more aggressive stance on large mergers.