In a recent ruling of a federal court, the judge made it clear that American Airlines Group has to stop its partnership with the JetBlue Airways corporation.
This ruling was made while being in accord with the Justice Department of the USA. The reason why both of these airline companies are not being allowed to continue their partnership is increased prices.
After this federal court ruling, American Airlines Group has only 30 days to terminate its business partnership or alliance with JetBlue. This federal court ruling is a decisive victory for the Biden administration.
The Joe Biden administration has always tried to tighten the rules on airline partnerships or mergers.
1. The Reaction of POTUS
The president of the USA, Joe Biden, appreciated this court ruling in a tweet.
He tweeted, “Our Administration has worked hard to get American air travelers a better deal and hold airlines accountable.
And now, @TheJusticeDept is protecting consumers from higher fares and fewer choices by blocking consolidation between two airlines.”
Our Administration has worked hard to get American air travelers a better deal and hold airlines accountable.
And now, @TheJusticeDept is protecting consumers from higher fares and less choices by blocking consolidation between two airlines. https://t.co/WCCwFVpaiq— President Biden (@POTUS) May 22, 2023
2. How the Lawsuit Was Filed?
The US Justice Department of 6 states together filed a lawsuit in the year 2021, wanting to annul the partnership deal in the year 2020. Because this partnership between American Airlines and JetBlue was already excluding incentives.
In this ruling by Judge Leo Sorokin, he stated that the partnership was decreasing the competition in the market.
3. Why Do They Need the Partnership?
American Airlines has a very good capacity and fleet in the entire USA. And JetBlue is also number 6 in terms of fleet and capacity. Both airlines partnered up to organize the flights and split up the earnings.
As of now, this federal court ruling affected the share prices of both airlines, and as for the airlines, they are going to work on their next actions. Both the airlines have said that the ruling is not correct, and they partnered up to benefit their customers.
Mr. Merrick Garland, who is the Attorney General, said that the federal court’s ruling is a victory for American citizens who want competition to exist to travel on a budget.
Remind you that the partnership between JetBlue and American Airlines was sanctioned by the Department of Transportation. This approval was given a few days before Donald Trump’s defeat in the elections.
4. What Did the Airlines Say?
In the courtroom, lawyers from these two airlines defended the airlines, saying that airfare was not lifted. The partnership did not reduce the number of flights.
They claimed that, on the contrary, this partnership elevated the flight capacity. According to them, it made both the airlines much more competitive against United Airlines and Delta Airlines, especially on the northeastern routes.
5. Other Similar Cases
The Justice Department is also in the news filing a similar lawsuit, and the Justice Department, with 4 other states, has filed a lawsuit to stop JetBlue from purchasing their competitor Spirit Airlines.
The Justice Department is saying that this acquisition would result in drastic price hikes. Not only this, but it would also decrease seats, which would be difficult for many travelers.
Last Updated on by Sathi Chakraborty, MSc Biology
