Salem Radio Network News Thursday, October 21, 2021

Business

American Airlines CEO expects U.S. challenge to JetBlue alliance

WASHINGTON (Reuters) -American Airlines Chief Executive Doug Parker said on Tuesday that he expected the U.S. Justice Department to file a lawsuit challenging American’s partnership with JetBlue Airways on antitrust grounds.

The U.S. Justice Department said that it would have a major antitrust announcement on Tuesday.

Parker said in an online Washington Post interview that he expected the government’s legal action challenging the alliance, which has been in place since January. “They are wrong. We will prove it,” Parker said. “We will vigorously defend it … I feel quite certain that we’ll prevail.”

“It’s entirely pro-competitve,” Parker said. He said the deal would provide “more choice to consumers” and “increase competition,” particularly in the busy airports in the U.S. Northeast. “By putting our networks together we give more choice to consumers … It’s already working. We’ve been at this since January.”

The Wall Street Journal had reported that the lawsuit against the airlines could come as early as Tuesday and would allege that the alliance would lead to higher prices for consumers.

Shares of American Airlines were down 2.6 percent on Tuesday at $19.79 while those of JetBlue were down 4.6 percent at $14.79.

The airlines’ “Northeast Alliance” partnership was announced in July 2020 and approved by the U.S. Transportation Department shortly before the end of the Trump administration.

The codeshare agreement allows American and JetBlue to sell each other’s flights in their New York-area and Boston networks and link frequent flyer programs in a move aimed at giving them more muscle to compete with United Airlines and Delta Air Lines in the Northeast.

JetBlue has said that the partnership means lower fares in the northeastern United States’ busy airports. “By codesharing with American and connecting to their global network, we create a true third competitor to Delta and United, which currently dominate this market,” JetBlue said.

The lawsuit is the second action the Biden administration has taken recently to ensure competition in the skies.

The Transportation Department said last week that it planned to award 16 take-off and landing slots at Newark Liberty International Airport to a yet-to-be-determined low-cost carrier, and said it could take action to boost competition at other major airports.

The Biden administration has nominated Jonathan Kanter, an antitrust lawyer, to be the head of the Justice Department’s antitrust division. No date has yet been set for his confirmation hearing.

(Reporting by Diane Bartz and David Shepardson in Washington, Editing by Mark Porter and Steve Orlofsky)

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