Alleged American Airlines partnership could lead to higher airfares

Senator Richard Blumenthal, a Democrat who has been outspoken on antitrust issues, expressed concern to the Transportation Department on Friday that a partnership between American Airlines and JetBlue Airways would lead to higher airfares.

The Northeast Alliance partnership was approved in July 2020 and announced by the Transportation Department six months later, shortly before the end of the Trump Administration.

The codeshare agreement allows American and JetBlue to link each other's flights in their New York-area and Boston networks and sell frequent flyer programs. It is a move aimed at giving them more muscle to compete with United Airlines and Delta Air Lines in the Northeast.

I write with grave fears that the recent joint partnership between American Airlines and JetBlue Airways will result in anticompetitive coordination at major air traffic hubs and cause the long-term inflation of airfares and related costs for airline passengers, Blumenthal said in a letter to U.S. Transportation Secretary Pete Buttigieg.

Blumenthal urged a full public interest review and investigation of the Northeast Alliance cooperative agreement, noting that President Joe Biden had signed an executive order on competition in July. Blumenthal used the White House as saying that the top four airlines had nearly two-thirds of the U.S. domestic market.

I am concerned that the Northeast Alliance is exactly the kind of arrangement which led us to this point and will lead to even more consolidation in an already overly concentrated industry. In the circumstances, this arrangement merits more scrutiny, he wrote.

In a statement, JetBlue said the partnership allowed Delta and United airlines to rival each other in real competition.

JetBlue said its access to American slots would mean that it could bring the JetBlue effect of lowering fares and stimulating demand to more routes in and out of the Northeast. The Transportation Department said on Thursday that it planned to give 16 take-off and landing slots at Newark Liberty International Airport to a yet-to-determined low-cost carrier and said it could take action to boost competition at other major airports.