JetBlue and American Airlines Expand Controversial Alliance

The Northeast Alliance will add new flights as a federal judge mulls an antitrust lawsuit.

For the past two years, American Airlines and JetBlue have had an agreement dubbed the Northeast Alliance. 

And for the past year and a half, the two airlines have coordinated schedules, shared revenue on flights from LaGuardia, JFK, Newark and Boston airports, and also sell seats on each other’s planes. The companies are not allowed to collaborate on prices.

Let’s just say the alliance is controversial. 

The airlines have argued that this partnership is good for consumers, and gives them more options in the Northeast, and also allows the companies to compete in the area with larger airlines such as Delta and United Airlines. 

But the Justice Department is not swayed by this argument.

The Biden Administration has been cracking down on monopolies and perceived antitrust violations of late, and the Justice Department has alleged that the Northeast Alliance is a merger in all but name that costs consumers $700 million a year in higher fares. Last September, the Justice Department, along with the attorneys general of six states and the District of Columbia, sued to block the alliance between American Airlines  (AAL) - Get Free Report and JetBlue  (JBLU) - Get Free Report.

The alliance “will 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,” the Justice Department’s suit alleges. “It will also closely tie JetBlue’s fate to that of American, diminishing JetBlue’s incentives to compete with American in markets across the country.”

Judge To Rule On Antitrust Lawsuit

U.S. District Judge Leo Sorokin has recently heard arguments from both the DOJ and lawyers for the airlines. 

The DOJ argues the alliance costs consumers hundreds of millions of dollars a year in higher fares. "It is a very important case to us ... because of those families that need to travel and want affordable tickets and good service," DOJ lawyer Bill Jones said in federal district court in Boston, as noted by Travel Weekly.

In response, representatives of the airlines argued that the alliance has created approximately 50 new routes out of the four alliance airports, increased frequencies on more than 130 existing routes and upped capacity on 90 nonstop routes. 

Judge Sorokin is currently reading hundreds of pages of submitted material and a decision is still weeks away.

JetBlue and American Airlines Introduce New Flights

It’s obviously unclear how the Justice Department’s lawsuit will play out.

But American Airlines and JetBlue do not currently seem deterred, at least publicly, as the two airlines have announced plans to add seven new year-round services next spring and three summer seasonal routes.

American will add six flights from New York's LaGuardia Airport starting on May 5, including flights to Buffalo, N.Y.; Greenville, S.C.; Grand Rapids, Mich.; Birmingham, Ala.; Columbia, S.C., and Knoxville, Tenn. 

JetBlue will add daily service between LaGuardia and Nassau, and new summer seasonal routes from LaGuardia to Hyannis, Mass., and Bermuda flights and daily summer seasonal service from Boston to Vancouver. 

JetBlue will launch four-times daily LaGuardia to Atlanta service this spring, replacing American's existing LaGuardia to Atlanta service.