U.S Justice Dept To File Lawsuit Against American Airlines-JetBlue Airways Alliance

(RTTNews) - The U.S Justice Department plans to file an anti-trust lawsuit against the deal between American Airlines Group Inc. (AAL) and JetBlue Airways (JBLU), the Wall Street Journal said on Tuesday, citing sources. According to the newspaper, the lawsuit could be filed as soon as Tuesday itself.  

In July 2020, both the airlines had announced the "Northeast Alliance" partnership, under which the airlines would trade their respective flights in the New York and Boston networks. The deal secured approval from the U.S Transport Department after a period of six months. This happened just before as the end of Trump's term at office.    As per the codeshare agreement, both the airlines have linked together their frequent flyer programs. This alliance was designed keeping in mind the stiff competition from other airlines like United Airlines and Delta Airlines in the busy North-Eastern airline routes.

The U.S Government is going ahead with the lawsuit as it is of the opinion that the alliance will lead to monopoly in the region and that in turn could result in higher fares. Wall Street Journal said that the Government will file the lawsuit to ensure that there is no monopoly and fair competition in the skies.

The "Northeast Alliance" was inaugurated early this year with both airlines adding around 60 new routes and helping flyers make use of the airlines' loyalty program to earn miles on their respective flights.

Commenting on the development, American Airlines said that it did not receive any notification of a lawsuit. The company said that its alliance with JetBlue was "providing more choices and better service for customers."

The lawsuit is the second step undertaken by the Biden administration to ensure fair competition among airlines. Last week the Federal Aviation Administration said it will allot 16 available slots at the Newark Liberty International Airport to a low-cost carrier, in a move that will bring about healthy competition.