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Northeast Alliance expected to cost California consumers hundreds of millions of dollars and impact flights to and from at least 10 California airports
OAKLAND – Attorney General Bonta today issued a statement on the first day of trial in the state’s lawsuit against American Airlines and JetBlue challenging an anticompetitive joint venture between the companies known as the Northeast Alliance. The Northeast Alliance allows American Airlines and JetBlue to function like a single carrier on routes to and from New York and Boston, posing a significant threat to competition in an industry already experiencing the impacts of consolidation through higher prices, lower-quality service, and fewer flights. In September 2021, Attorney General Bonta joined the U.S. Department of Justice and attorneys general from Arizona, the District of Columbia, Florida, Massachusetts, Pennsylvania, and Virginia, in filing a lawsuit against American Airlines and JetBlue alleging that the Northeast Alliance violates the federal Sherman Act.
“For many families, it’s been a summer of travel nightmares,” said Attorney General Bonta. “Between sky-high flight prices, cancellations and delays, and frustrating customer service, the airline industry this year has repeatedly failed to deliver for its customers. Now, American Airlines and JetBlue are threatening to make our travel headaches worse with an anticompetitive new venture that will hurt competition in more than 100 markets, including Los Angeles, San Francisco, and San Diego — costing California consumers an estimated hundreds of millions of dollars each year. That's unacceptable. We are in court today to prevent this unlawful attempt by American Airlines and JetBlue to merge their operations and reduce competition in the marketplace.”
Over the past decade and a half, mergers and acquisitions have killed off several major airlines leaving just a handful in control of the vast majority of domestic air travel. Now, the largest airline in the world, American Airlines, and its long-time competitor, JetBlue, have entered into an unprecedented and anticompetitive pact. Under the Northeast Alliance, these rivals have agreed to stop competing on domestic flights to and from Boston and New York City, instead coordinating on which routes to fly, when to fly them, and how many seats to offer. As a result, American Airlines and JetBlue have effectively merged their operations for routes that begin or end in Boston and New York — routes comprising two-thirds of JetBlue’s business.
In California, this anticompetitive venture is expected to substantially increase market concentration on high traffic routes to and from at least 10 California airports in Los Angeles, San Francisco, San Diego, Long Beach, Burbank, Ontario, Oakland, Sacramento, San Jose, and Santa Ana. The loss of competition on these routes is expected to result in hundreds of millions of dollars in annual consumer harm, reduced choice, and worse service.
Today’s trial begins against the backdrop of JetBlue’s recent attempt to acquire yet another disruptive airline, Spirit Airlines, the largest ultra-low-cost carrier in the country, further eroding competition in the industry. At trial, the coalition will argue that the Northeast Alliance violates the federal Sherman Act because the Northeast Alliance reduces competition and harms consumers in over one hundred markets where American Airlines and JetBlue previously competed.
Information on where to view the trial is available: https://forms.mad.uscourts.gov/courtlist.html.
A copy of the pre-trial brief is available here.