DOT may re-examine its approval of the American-JetBlue alliance

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American and JetBlue's alliance to codeshare, align schedules and trade slots at New York and Boston airports may be given a second look by the DOT.
American and JetBlue's alliance to codeshare, align schedules and trade slots at New York and Boston airports may be given a second look by the DOT. Photo Credit: Credit: NYC Russ/Shutterstock.com

The Department of Transportation said it plans to examine whether the recently approved American-JetBlue Northeast Alliance should be subject to a second, more public, review.

"The Department will evaluate the record in the docket initiated by Spirit and determine if there is sufficient basis to conclude that an investigation would be in the public interest," a DOT spokesperson said Tuesday.

Other parties that have objected to either the JetBlue-American alliance or to the DOT's approval process include Southwest; United; the National Air Carrier Association, which lobbies for ultralow-cost carriers; and the nonprofit American Antitrust Institute.

DOT approved the agreement on Jan. 10 during the waning days of the Trump administration. JetBlue and American plan extensive codesharing to and from the New York and Boston markets, as well as a loyalty program partnership. The carriers have also entered into provisions to swap valuable arrival and departure landing slots between each other at capacity-constrained New York-area airports and to make joint scheduling decisions within the Boston and New York-area markets.

As part of the approval, the carriers agreed to divest of a combined 13 daily slot pairs at New York JFK and Washington Reagan National airport, leasing them out to competitors for five-year terms. They also committed to growing capacity out of New York and would be required to divest of more slots if they fail to do so.

Still, the approval has drawn concerns from discount carriers, who argue that the tie-up will lead to less consumer choice in the Northeast. American and JetBlue intend to begin codesharing on flights from the New York area and Boston during the first quarter and to begin aligning their Northeast schedules during the first half of the year. 

The DOT has also come under scrutiny for not opening its review of the proposed partnership to public comment.
On Monday the American Antitrust Institute was the latest to make that complaint, calling the review process, "highly irregular."

"By not taking public comments, the DOT deprived consumers, other airlines and industry participants, advocacy and public interest groups, and Congress, of any ability to raise public interest concerns," Diana Moss, the organization's president, wrote.

Spirit was the first airline to formally object to the agreement, initiating its own public docket on Jan. 7 to argue that the Northeast Alliance would cause diminished competition on the 26 routes out of JFK, LaGuardia and Boston that the carriers both fly.

Spirit supplemented that complaint on Jan. 19 with an argument that the published agreement between the DOT, American and JetBlue lacks sufficient analysis on how it would affect the competitive environment.

"The agreement sheds no light on what the impact of the alliance will be on competition, or whether the conditions accepted by American and JetBlue will offset the anticompetitive impact to any relevant degree," the carrier said.

Neither American nor JetBlue responded immediately to requests for comment. The carriers have said the alliance will help them more quickly recover from the Covid-19 crisis. American envisions the partnership facilitating new long-haul service from New York to markets in Europe, Africa, India and South America while JetBlue has pledged to grow in the New York metroplex. Last week American announced spring launch dates for routes from JFK to Athens and Tel Aviv, both of which are associated with the alliance.

In a filing last week, JetBlue said that DOT's review process was thorough; that competitors were aware of the proceedings; and that they had ample time to make their concerns felt to DOT staff.

"As a legal matter, there are no grounds to now revisit or reopen DOT's review of the Northeast Alliance," wrote Robert Land, JetBlue's senior vice president of government affairs. 

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