Attorney General Maura Healey is suing American Airlines and JetBlue, joining the federal government and five other states in a complaint that alleges the airlines are harming travelers by consolidating operations in Boston and New York City.
At issue is the series of agreements the airlines refer to as their “Northeast Alliance,” under which American and JetBlue essentially coordinate who will fly which routes and when between Logan International Airport, JFK International Airport, LaGuardia Airport and Newark Liberty International Airport. They will also share their revenues from those airports.
“By consolidating their businesses in this way, American and JetBlue will effectively merge their operations on flights to and from the four airports — which collectively account for two thirds of JetBlue’s business. In so doing, the Northeast 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 complaint filed by the U.S. Department of Justice, Arizona, California, Florida, Massachusetts, Pennsylvania and the District of Columbia said. “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.”
The complaint says American Airlines is “the largest airline in the world” and describes JetBlue as “a uniquely disruptive low-cost airline” that “has provided an important and steadfast source of competition.” In the complaint, Healey and her counterparts said that the Northeast Alliance between American and JetBlue could cost hundreds of millions of dollars worth of damage to travelers in the form of higher prices and reduced choice.
“When airlines compete on price, quality and innovative services, consumers benefit. This consolidation would undermine the competition that has greatly benefitted Massachusetts consumers,” Healey said. “With today’s lawsuit, we are taking action to ensure that JetBlue and American Airlines maintain incentives to provide lower costs and better service at Logan Airport and elsewhere.”
The civil antitrust complaint was filed in the U.S. District Court in Massachusetts and it aims to have the courts permanently enjoin American and JetBlue from further implementing their Northeast Alliance plans.
“Before the alliance, Delta and United dominated the New York City market. The NEA has created a third, full-scale competitor in New York and is empowering more growth in Boston,” American Airlines Chairman and CEO Doug Parker said Tuesday. “Ironically, the Department of Justice’s lawsuit seeks to take away consumer choice and inhibit competition, not encourage it.”
