🛬 Antitrust comes to the friendly skies

Believe it or not, there’s an antitrust action that doesn’t involve Big Tech.

American Airlines and JetBlue are slated to partner up, and the Department of Justice is fighting the alliance with an antitrust lawsuit, according to the Wall Street Journal.

• The DOJ claims JetBlue’s and American’s partnership will lead to higher prices and fewer routes: The airlines, not surprisingly, say the opposite. They say that customers in their northeast hubs now have more options and lower prices. 

• Airlines have often been the targets of DOJ concern: Nearly every big merger in recent years has led to a legal challenge. This one is slightly different because it’s not even a true merger. Each company will stay independent. But pretty much all those recent mergers have gone through (four airlines now command 80% of the market), and there isn’t much competition left, making the government nervous about any deals between airlines. 

Will this alliance go through, too?

History would suggest so, but the Biden Administration has obviously emphasized antitrust actions. In July, Biden signed an executive order announcing the need to ensure competition in the American economy and specifically highlighted the airline industry. 

The Verdict

Even if this gets through the DOJ, there may be more action to come. JetBlue had previously been looking for a merger partner.