[WASHINGTON, D.C.] – Today, U.S. Senator Richard Blumenthal (D-CT), member of the Senate Commerce, Science, and Transportation and Judiciary Committees, called on the U.S. Department of Transportation (DOT) to address significant concerns of further consolidation in the airline industry raised by an agreement between American Airlines and JetBlue Airways. Blumenthal urged the DOT to ensure its decision is consistent with President Joe Biden’s recent Executive Order on Competition, which was issued earlier this year to protect consumers from the negative effects of rising monopoly power in the U.S. economy.
“I write with grave concerns that the recent joint partnership between American Airlines and JetBlue Airways will lead to anticompetitive coordination at key air traffic hubs and result in the long-term inflation of airfares and related costs for airline passengers,” wrote Blumenthal to DOT Secretary Pete Buttigieg. “I urge the Department of Transportation to conduct a full public interest review and investigation of the Northeast Alliance cooperative agreement—consistent with President Biden’s recent Executive Order on Competition—before taking any further action on merits of this venture.”
The DOT “must be vigilant” in carrying out President Biden’s Executive Order, Blumenthal wrote, “to ensure that further consolidation of the airline industry does not create a toxic environment for competition and consumers, particularly in the context of affordability and accessibility of air service.”
The American-JetBlue agreement—the Northeast Alliance—lets the two airlines share revenue, allows for reciprocal frequent flyer programs, and permits codesharing that enables customers to book tickets with routes flown by both airlines at important Northeast hubs, including Washington, D.C., New York City, and Boston, raising concerns that this would result in higher costs for consumers and further consolidation in the already-concentrated airline industry.
“Antitrust enforcers have traditionally been highly suspicious of agreements that lead rivals to cooperate instead of compete. And they should be especially suspicious when major airlines agree not to compete in an already highly consolidated industry, with major implications for lower-cost carriers,” Blumenthal continued, calling on the agency to seek input from the public and antitrust regulators.
In January, the Trump Administration approved the American-JetBlue joint venture, without an opportunity for public input. Spirit Airlines filed a complaint with DOT, requesting a full and formal investigation of the agreement, and Southwest Airlines filed a letter supporting Spirit’s complaint. The complaint allows the DOT to reconsider its prior views on the partnership.
The full text of the letter can be found here.