American, JetBlue Seek Dismissal of Antitrust Lawsuit

The motion to dismiss, along with a separate motion to seal certain documents, was filed in the U.S. District Court in the District of Massachusetts on Monday, Nov. 22, 2021.

Airlines Say Justice Department has Zero “Factual Allegations” of Anticompetitive Effects

In the months after the U.S. Department of Transportation approved the plans for American and JetBlue to form a partnership focused on the Northeast Corridor, a new attorney general under a new administration challenged it under antitrust laws. According to the government’s argument, the alliance will reduce competition and potentially drive prices up for flyers.

However, the lawyers for both carriers say that the agency has not provided an argument against the Northeast Alliance. Their argument has two parts: First, the airlines say that since the alliance began, the government has not proven it has harmed other airlines or consumers.

“Under Section 1 of the Sherman Act, Plaintiffs must allege anticompetitive effects in a relevant market and must plausibly allege that Defendants have market power in the relevant market,” the motion reads. “, Plaintiffs have not alleged that the Northeast Alliance between the Defendants actually harmed competition. Without factual allegations of any marketwide anticompetitive effect, Plaintiffs’ Complaint fails as a matter of law.”

Second, the attorneys claim to successfully prove their antitrust complaint, they must prove that both carriers could control prices through capacity restrictions. Although JetBlue is taking advantage of certain American takeoff and landing slots, the motion claims the lawsuit has not specified where the carriers could manipulate prices with their market control.

“Market power requires a showing that Defendants can raise price by restricting output, which Plaintiffs do not even attempt to allege,” the complaint states. “Plaintiffs’ market power allegations are also deficient because Plaintiffs have not alleged a properly defined relevant market.”

In addition, the two airlines asked for certain documents relevant to the case to be sealed by the judge. They include documents about the business operations of the Northeast Alliance and key business documents between the two carriers.

Attorneys for the Justice Department have not yet filed a counter to the motion. The move is still pending before a judge, and no decision has been made.

Northeast Alliance Continues to Operate as Normal

With a decision in the case still pending, both American and JetBlue are continuing to implement the tenets of the Northeast Alliance. In October, both carriers rolled out reciprocal benefits for elite flyers, followed by American announcing the end of their East Coast Shuttle service.