American Airlines, JetBlue alliance will harm travelers, according to U.S. Justice Department lawyers. American Airlines Group alliance with JetBlue Airways Corp will harm travelers while the airlines pushed back during closing arguments on Friday in the government's bid to dissolve the partnership.
The Northeast alliance is a de facto merger of the companies' Boston and New York operations, according to the six states and the District of Columbia. The airlines coordinate flights and pool revenue to the detriment of travelers through the alliance, arguing consumers face nearly $700 million in extra annual costs.
U.S. District Judge Leo Sorokin in Boston plans to hold another hearing before he makes a decision on the case.
The Justice Department lawyer Bill Jones argued that the alliance gives the airlines incentives to raise prices and that they are no longer competing.
Jones said that this is a bad deal for travelers because of the impact on families that travel and who want affordable tickets and good service.
Jones said that the government wants to make sure there is as much competition as possible in the airline sector, and this deal threatens to do exactly the opposite. The alliance, which was announced in 2020, has not resulted in flight cuts, according to lawyers for JetBlue and American. They said it increased flights and made them more competitive with Delta Air Lines and United Airlines on the northeast routes.
Daniel Wall, a lawyer for American, rejected the government's analysis that the alliance will hike consumer prices and make these markets more competitive than they otherwise were. Wall said that consumers and the Justice Department could file a lawsuit at a later date if the alliance was proven to be anticompetitive. This is not a situation in which you need to destroy the consumer benefits of the alliance based on speculation the other side is giving you, Wall said.
Last month, Spirit Airlines shareholders voted in favor of JetBlue's $3.8 billion takeover offer, but they also had to deal with an uphill struggle for regulatory approval.