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DOJ steps up antitrust probe of American Airlines-JetBlue partnership: report

DOJ steps up antitrust probe of American Airlines-JetBlue partnership: report
© Greg Nash

The Department of Justice is reportedly stepping up its antitrust probe of the American Airlines-JetBlue partnership announced last year, expressing concern that the alliance could cause anti-competitive coordination and lead to increased ticket prices at essential traffic hubs.

According to The Wall Street Journal, which cited people familiar with the matter, department antitrust officials have increased their scrutiny of the deal in recent months. The department is reportedly concerned that the partnership, which was announced in July 2020, will decrease competition at bustling Northeast airports in New York and Boston.

The investigation, according to the Journal, is ongoing, and no final conclusions have been made.

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In response to a question about the DOJ investigation and other filings objecting to the partnership during an earnings call in January, Stephen Johnson, American Airlines Group Executive Vice President of Corporate Affairs, said the investigation into the merger will continue.,

“My suspicion is that they're going to allow it to be implemented and see and take a look and determine whether the benefits that we promised actually do materialize. And if they do, I think we'll be fine,” he said.

In a statement to The Hill, an American Airlines spokesperson said that both airlines made a “series of commitments” to ensure the alliance “increases competition and travel options for customers,” and that they are “fully cooperating” with the DOJ’s review.

JetBlue’s Corporate Communication Team told The Hill, in part, that “After years of trying, unsuccessfully, to add flying in airports like LaGuardia and Newark, it is clear that the only path for JetBlue to grow is through this alliance."

"We have shown time and again when JetBlue is given the opportunity to expand service, fares go down across the board and competitors are forced to match us," the airline added.

The newspaper noted, however, that any decision made by the Justice Department could be overruled by the Department of Transportation, which has wide regulatory jurisdiction over the industry.

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In the final days of the Trump administration, a Transportation official signed off on the partnership between the two airlines.

 

The Transportation Department, however, is facing outside pressure to re-examine the partnership between the airlines. Spirit Airlines filed a complaint with the Transportation Department, requesting an on-the-record investigation of the agreement between American Airlines and JetBlue, a DOT spokesperson confirmed to The Hill.

Other interested parties have also submitted filings in support of launching an on-the-record investigation.

According to the spokesperson, the Department “is evaluating the record” and will announce action that it intends to take in this matter in the next few months.

The two airlines announced their “strategic partnership” in July 2020, saying it would “create seamless connectivity for travelers in the Northeast and more choice for customers across their complementary domestic and international networks,” according to a statement from American Airlines.

The company added that the partnership will “accelerate each airline’s recovery as the travel industry adapts to new trends as a result of the pandemic.”

-- Updated 3:00 p.m.