JetBlue CEO Says DOJ Has No Case in American Alliance Inquiry

(Bloomberg) -- JetBlue Airways Corp. Chief Executive Officer Robin Hayes on Monday defended the airline’s alliance with American Airlines Group Inc., saying the U.S. Justice Department doesn’t have evidence to support allegations that it is anti-competitive.  

The so-called Northeast Alliance has increased competition in the New York area and Boston, Hayes said in an interview. He pointed to additional domestic flying by JetBlue and international route additions from American since the U.S. Transportation Department ended its review of the arrangement in the final weeks of the Trump administration. JetBlue is hiring 1,800 workers and delaying retirement of some aircraft to support the alliance, while fares have declined as the partners step up competition with United Airlines Holdings Inc. and Delta Air Lines Inc., he said.

Questions about the alliance have expanded since President Joe Biden’s July executive order to broadly increase competition. It called out the airline industry, among others, and said the Transportation and Justice departments must consult on how consolidation has affected passengers, as well as review the award of flying rights at congested airports. 

The Justice Department, along with attorneys general from New York and Massachusetts, earlier began investigations of the Northeast Alliance. Spirit Airlines Inc. and Southwest Airlines Co. have filed complaints saying that it was approved without a full public review and have called for renewed scrutiny. 

“We don’t believe there is any case,” Hayes said of the DOJ review. “We believe the overwhelming evidence is already pointing to more JetBlue routes, more low fares, more choice. Rather than DOJ looking at that they should continue to monitor and make sure those benefits continue to be delivered.” 

Hayes’s comments followed a Sept. 17 letter from Senator Richard Blumenthal of Connecticut, who urged the DOT to conduct a second investigation of the alliance in light of Biden’s executive order. Hayes said the DOT already conducted an “exhaustive” review of the partnership.

New Routes

JetBlue and American have announced 58 new routes from airports covered by the NEA, the airline said, including 18 new international flights that have begun or will start by 2022. They have increased frequencies on more than 130 routes. Other carriers have improved their own products and services as a result of the alliance, American said in a statement.

“This has been the biggest catalyst of growth JetBlue has had since we were created,” Hayes said of the alliance and competition with larger carriers. “The ability to quadruple flights at LaGuardia, add flights at JFK and Newark. None of that would have been possible without the NEA.”

The airlines agreed to sell a combined seven slot pairs at New York’s John F. Kennedy International Airport and lease out a combined six slot pairs to competitors at Ronald Reagan Washington National Airport under an agreement with the DOT to allow the alliance. Slots are used to control flights at congested airports, and one slot allows for one takeoff or landing. JetBlue and smaller carriers historically have struggled to gain access to slots at some of the largest airports. 

American and JetBlue also cannot coordinate on fares or revenue management either within or outside of the Northeast Alliance under constraints set by the DOT.  

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