Bass, Berry & Sims attorney and Antitrust & Trade Practices Group Co-Chair Michael Dashefsky provided insight on the proposed alliance between American Airlines and JetBlue Airways, called the Northeast Alliance, that will allow the airlines to coordinate routes at airports in Boston and New York/Newark. While the Department of Transportation (DOT) approved the alliance under the Trump administration, the Department of Justice (DOJ) is now fighting to block the alliance, claiming it eliminates competition and will harm consumers.

The “DOJ’s lawsuit seems to show that they’re not giving much credit to the new flights enabled by this alliance, and they appear to be unsympathetic to the extraordinary challenges faced by the airline industry due to COVID-19,” said Michael. “Both airlines are using the alliance to launch new routes from Boston and New York that otherwise might not exist, and they don’t have a huge number of overlapping routes from those cities, so it’s hard to see how the alliance harms travelers,” he added. “Furthermore, this isn’t a merger. DOJ could sue to block the alliance at a later date if they don’t like the effects. But instead of taking a wait-and-see approach, the DOJ is suing now, even though we have little idea what the airline industry will look like post-pandemic.”

“International alliances are much more common, but those alliances usually operate under antitrust immunity granted by DOT, which prevents DOJ from suing,” Michael said. “DOT has frequently granted antitrust immunity to international alliances over objections filed by DOJ, indicating that DOT historically has viewed these alliances much more favorably.”

The full article, “DOJ’s American-JetBlue Suit An Aggressive Antitrust Flex,” was published by Law360 on September 23 and is available online.