US Justice Department Gearing Up to challenge the JetBlue Airways Corp and AAL.O Partnership

2021-10-08 by JamesD
jetblue tailfins source jblu

The Justice Department of the United States is gearing up to begin a lawsuit with which it seeks to challenge the AAL.O  partnership between JetBlue Airways Corp JBLU.O and the American Airlines Group Inc. The challenge will be coordinated on the grounds of antitrust and competitiveness grounds according to Wall Street sources.

Soon after word broke out about the DOJ’s impending lawsuit against the partnership, the stocks of both companies fell significantly: JetBlue Airways fell 3% while American Airlines Stock fell 2%. The Department of Justice believes the partnership and alliance between the two companies would ruin competitiveness and could end up making travel tickets more expensive for the average traveler.

The DOJ’s move is in line with an executive order signed by President Biden that seeks to increase the level of competition prevailing in different sectors. The executive order also seeks to break the consolidation of companies that have been together for years so that the welfare of the average American Worker can be improved.

Senator Richard Blumenthal is one of those that don’t like the airlines’ alliance very much. The Democrat Senator is known for not being a fan of antitrust and he’s been vocal about his reservations on the JetBlue Airways and American Airlines partnership. He wrote a letter to the United States Department of Transportation to that effect, stating how concerned he is by the partnership.

Blumenthal, therefore, urged that an in-depth review of the matter be conducted in the interest of the public. He also urged that a comprehensive review of the Northeastern Alliance be conducted, referring to the executive order by President Biden addressing the need for competition in different sectors.

Troubled Partnership

The troubled partnership between JetBlue and American Airlines was dubbed the Northeast Alliance by the companies themselves, and they announced the commencement of their partnership in July 2020. The Northeastern Alliance was approved by the Department of Transportation some months after, at the tail end of the Donald Trump presidency.

Their agreement allows both JetBlue and American Airlines to sell their flights in the Boston and New York areas of the US. There’s also an initiative to link frequent flyers into a program and also consolidate resources to remain competitive in the market by being able to withstand competition from airlines like Delta Airlines and the United Airlines.

The two carriers involved in the partnership believe it will result in considerable growth in both cities and that uninterrupted transportation services would commence, in addition to leading to more routes and code sharing. They plan to expand their operations and launch new flights to places like Savannah, New Orleans.