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Report: American, JetBlue Alliance to Face Justice Department Challenge

The U.S. Department of Justice will file a lawsuit to challenge American Airlines and JetBlue’s partnership on antitrust grounds, The Wall Street Journal reported on Tuesday.

The carriers’ Northeast Alliance in January received approval from the U.S. Department of Transportation with some concessions, including a requirement to divest some slots at Washington Reagan National and New York’s John F. Kennedy airports. That was in the last days of the Trump administration, however, and the Biden administration is operating under an executive order earlier this summer “promoting competition in the American economy.” The lawsuit will claim that the alliance could harm competition and lead to higher fares, The Wall Street Journal reported.

The lawsuit could come as soon as Tuesday, according to the report.

In a statement provided to BTN, American Airlines countered the claim that its alliance was anticompetitive. Since February, the alliance has resulted in 58 new routes out of JFK, LaGuardia, Boston and Newark and 18 new international routes that either have launched or will start by 2022.

“[The alliance is] already providing more choices and better service for customers with more code sharing, new international and domestic routes, better schedules and expanded frequent flier program benefits,” according to American Airlines’ statement. “It’s also provoking a competitive response from other carriers in the region by compelling them to step up their own products and services, delivering clear wins for consumers.”

The lawsuit would be the second action in recent weeks showing the Biden administration plans to take a hands-on approach regarding airline competition. Last week, U.S. DOT issued a notice that it plans to identify a low-cost or ultra-low-cost carrier to operate 16 peak afternoon or evening slots at Newark to “provide air travelers with more choices and lower prices,” according to Deputy Transportation Secretary Polly Trottenberg.

DOT also is working on rules to enhance passengers’ rights when they decide to cancel a flight that is still operating because of government restrictions and to increase transparency of ancillary fees, according to the department.

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