Issue No. 832
U.S. Sues to Split Up American and JetBlue
Justice Calls the Northeast Alliance Anticompetitive; the Airlines Vow to Fight Back
Pushing Back: Inside the Issue
We thought it could happen when the U.S. Justice Department (DOJ) said it was looking into the American Airlines-JetBlue Airways Northeast Alliance. And it did. Last week, the DOJ filed a suit in the U.S. District Court for the District of Massachusetts alleging that the Northeast Alliance is anticompetitive. Also not surprising: Both airlines immediately fought back. American CEO Doug Parker flatly said of DOJ, "They are wrong, and we will prove it."
Consensus seems to be that the DOJ's case is unlikely to unwind the alliance. The two airlines may be forced to divest more slots at congested Eastern airports, but the alliance will stand. But the suit could have a chilling effect on further consolidation, or "consolidation-lite." And although the structure of the American-Alaska Airlines alliance on the West Coast is different, it remains to be seen if that deal will also come under scrutiny.
Elsewhere in this issue, Delta Air Lines CEO Ed Bastian hinted that the carrier could add Boeing 737 Max aircraft to its fleet. If true, it would be the carrier's first major Boeing order in a decade. Airbus jumps into the eVTOL sector and lends its huge credibility to so-called "air taxis." And bookings surged by, in some cases, triple digits in the days after the Biden administration announced the U.S. will start admitting vaccinated travelers in November.
The Airline Weekly Lounge Podcast
This week in the Lounge, Edward Russell and Madhu Unnikrishnan recount the Skift Global Forum and their chats with the leaders — or incoming leaders — of Air France-KLM and Southwest Airlines. And they debate whether the U.S. Department of Justice will be successful in its suit to break up American Airlines and JetBlue Airways in the Northeast. For a full archive of the podcast, go here. A new episode drops every week.