US, Massachusetts sue American Airlines, JetBlue over deal that could mean fewer flights, higher costs out of Logan

The US government, Massachusetts, respective different states and the District of Columbia contiguous filed an anti-trust suit against American and JetBlue - Logan's largest hose - alleging that a route-sharing woody betwixt them volition dramatically bounds user prime and rise the outgo of flying to and from Logan and New York-area airports.

In their suit, filed successful US District Court successful Boston, the US and the states charge:

Under their alleged “Northeast Alliance,” the 2 rivals person softly agreed to stock their revenues and coordinate which routes to fly, erstwhile to alert them, who volition alert them, and what size planes to usage connected flights to and from 4 large airports: Boston Logan International Airport, John F. Kennedy International Airport, LaGuardia Airport, and Newark Liberty International Airport. By consolidating their businesses successful this way, American and JetBlue volition efficaciously merge their operations connected flights to and from the 4 airports—which collectively relationship for 2 thirds of JetBlue's business. In truthful doing, the Northeast Alliance volition destruct important contention betwixt American and JetBlue that has led to little fares and higher prime work for consumers traveling to and from those airports. It volition besides intimately necktie JetBlue's destiny to that of American, diminishing JetBlue's incentives to vie with American successful markets crossed the country. The United States and Plaintiff States bring this enactment to forestall the hundreds of millions of dollars successful harm to consumers that volition hap if these 2 rivals are permitted to support this modern-day mentation of a nineteenth-century concern trust.

The suit details the peculiar interaction JetBlue has had connected fares to and from Logan implicit the past 15 years - and truthful the imaginable effect from eliminating it arsenic a competitor:

JetBlue's estimation for lowering fares is truthful good known successful the hose manufacture that it has earned a name: the "JetBlue Effect." JetBlue's grounds successful Boston and New York City illustrates why. Since launching work astatine Boston Logan successful 2004, JetBlue has challenged the large airlines—including American—by offering little fares and amended service. Consumers voted with their feet. JetBlue became Boston's starring airline, offering much flights retired of Boston than immoderate different airline. What's more, JetBlue forced American and different airlines that service Boston to little their fares arsenic well. This contention has resulted successful important savings for consumers. In 2019, JetBlue estimated that it had saved consumers flying to and from Boston much than $3 cardinal since it started serving the airdrome successful 2004. JetBlue has had a akin effect successful New York City. In a presumption titled "16 Years of Disrupting the Industry," JetBlue explained that "there's nary question we are a disruptor. There's nary amended illustration of however we've influenced alteration than astatine our location astatine JFK Airport."

Before entering into the Northeast Alliance, American and JetBlue were poised to vie adjacent much intensively. Having fallen importantly down JetBlue successful Boston, American had vowed to "win BOS back" by adding routes, expanding capableness connected existing flights, and obtaining caller gates. Likewise, JetBlue had announced much flights to and from Boston. JetBlue was besides pursuing opportunities to grow successful New York City, and considering enlargement astatine American strongholds similar Philadelphia, Miami, and Los Angeles. As a JetBlue web readying enforcement explained successful June 2020, "one of the astir communal trends successful JetBlue's 20 twelvemonth past is easy stealing stock from AA [American] and yet winning. So that applies to PHL [Philadelphia] and MIA [Miami]."

JetBlue had besides announced plans to motorboat its archetypal transatlantic flight, from New York to London, and publically touted plans to further grow work to Europe, successful what promised to beryllium the astir important situation to the 3 planetary alliances' stranglehold successful those markets. "These fares are obscene—they are obscene—and they should not beryllium permitted to exist," JetBlue's CEO said of the bequest airlines' transatlantic work successful 2019. "[F]or a low-cost bearer to travel successful and subject the market, little fares, make much availability, I deliberation that's a bully thing." Indeed, American executives feared the interaction that JetBlue's caller transatlantic work would person connected fares. On flights betwixt Boston and London Heathrow, for example, American disquieted internally astir a "50-60% fare driblet successful BOSLON erstwhile B6 [JetBlue] starts non-stop service."