Last July, American Airlines and JetBlue Airways announced a wide-ranging partnership designed to improve their competitive positions in New York and Boston.
Over the past few months, the airlines have started to implement the first phase of this alliance. They have launched a codeshare agreement, begun ticket sales for dozens of new routes, and optimized their schedules on additional routes out of New York and Boston.
Last week, American and JetBlue rolled out the next phase of their alliance, again announcing dozens of new routes. With antitrust regulators at the Department of Justice (DOJ) taking a closer look at the airlines’ plans to cooperate, the timing couldn’t have been better.
The partnership between American Airlines and JetBlue Airways involves coordinating routes and schedules for flights to and from New York and Boston. Normally, this type of cooperation would violate antitrust law.
The airlines sought an exemption to the usual antitrust regulations on the grounds that teaming up would make them a better counterweight to United Airlines and especially Delta Air Lines in the Northeast. They promised to significantly increase capacity in New York — and, to a lesser extent, Boston — while also divesting some takeoff and landing slots to enable new competition.
Based on these commitments, the US Department of Transportation gave its blessing to the partnership in January. However, antitrust regulators at the Department of Justice remain worried that letting the two airlines cooperate could lead to higher fares and worse service in New York and Boston. The DOJ’s investigation has become more active in recent months, and antitrust regulators there may raise objections to the alliance, according to a recent report by The Wall Street Journal.
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