The world is our oyster once again as COVID restrictions have been lifted and the airline industry has regained a foothold. Whether you are a high roller who only takes direct first-class flights or someone who has alerts set up on Hopper to get the best deal, the business behind the airline business affects you.
In particular are mergers of airlines where a smaller company is acquired by, or partners with, a larger one. Is this good for lower airfare? It depends – and antitrust laws are in place to ensure that mergers and acquisitions do not result in monopolies which give consumers fewer choices.
That brings us to American Airlines and JetBlue. The two formed what they call a “northeast alliance” in 2020 but the DOJ under the Biden administration is no longer smashing the subscribe button. The alliance was meant to help both airlines compete with Delta and United Airlines in the northeast region of the United States. Now it is being questioned as a potential competition killer. Meanwhile, an actual merger is in the works for JetBlue and Spirit Airlines.
But American Airlines and JetBlue are not just being sued by the DOJ – a class action lawsuit has also been filed between the two airlines. Remember when JetBlue was the go-to for discount airfares? If you’re booking a flight in the northeast, you may find that you are now paying more. Critics cite that JetBlue no longer needs to build its branding around discount flights since getting cozy with American Airlines and that customers have been overcharged to the tune of $700 billion since the alliance’s inception. A portion of the consumer complaint reads:
“The alliance eliminates head-to-head competition between the defendants, reducing consumer choice as well as price competition in the market generally, and increases the likelihood of anticompetitive coordination.”
The defense?
JetBlue, while prevented from commenting directly on the case, delivered the following statement to Bloomberg Law: “The alliance’ is delivering significant benefits to customers by creating a third viable competitor in the Northeast. So far, the NEA has resulted in approximately 50 new routes out of JFK, LaGuardia, Boston, and Newark; increased frequencies on more than 130 routes since February 2021; 90 nonstop routes with increased capacity; and 17 new international routes launched by 2022.”
Rulings are expected in 2023.
The following are a sampling of documents pertaining to the airline industry currently available on RealDealDocs:
American Airlines Reports Third-Quarter 2022 Financial Results
American Airlines Group Inc. 10-Q
Delta Air Lines, Inc. Exh 31 Rule 13A-14(A)/15D-4(A) Certification
Supplemental Agreement No. 10 To Purchase Agreement Number 04761 Between The Boeing Company And United Airlines, Inc. Relating To Boeing Model 737 Max Aircraft
Sources
U.S. Suit Over Alliance of American Airlines and JetBlue Goes to Trial
American-JetBlue Alliance Draws Consumer Case After Trial
Image courtesy of Gipish at Pixabay