The state of California has filed a lawsuit against the U.S. Department of Transportation and American Airlines, accusing them of illegally colluding to keep airfares high and stifle competition in the airline industry.
The american airlines antitrust suit over alliance is a lawsuit that was filed against American Airlines and JetBlue. California’s Attorney General has joined the federal government in this lawsuit.
California joins the lawsuit filed by the federal government against American Airlines and JetBlue.
on September 28, 2021 by Gary Leff
Senator Chuck Schumer jokes that the most hazardous spot in Washington, D.C. is between him and a television camera.
However, Schumer seems to have a West Coast rival in California Attorney General Rob Bonta, who has hurried to join the Justice Department’s case against American Airlines and JetBlue over their Northeast alliance, which includes Boston and New York, for a variety of reasons.
The lawsuit challenges the Northeast Alliance, which they claim is an anticompetitive joint venture that would impact high-traffic air markets like San Diego.
…This “anticompetitive” endeavor is anticipated to affect at least nine airports in California with flights to and from the East Coast, costing California customers hundreds of millions of dollars, according to Bonta.
Let’s have a look at this. What impact will the deal covering flights to New York and Boston have on… San Diego? San Diego to New York or Boston is not served by American Airlines. As a result, it won’t happen.
By the way, American presently does not travel from Sacramento or San Jose to Boston or New York JFK.
So, to assist California’s Bonta, let’s examine where American and JetBlue both travel from the West Coast to the East Coast and see how partnership affects competitiveness. (Hint: they are some of the fiercestly contested markets.)
- In terms of flights, seats, and seat miles, American Airlines is the second biggest airline at LAX this month, behind only Delta. According to Cirium Diio Mi’s schedule data, they account for 19% of Los Angeles departures.
- According to Diio Mi schedule data for September, JetBlue is the sixth biggest airline at LAX in terms of seats (6th largest based on flights and seat miles).
- To be sure, both American and JetBlue fly from LAX to Boston and JFK in New York. United and Delta, on the other hand, provide six peak daily LAX-Boston flights and ten peak daily New York JFK departures.
United provides eight peak daily LAX-Newark flights, whereas American does not fly the route. Los Angeles, Boston, and New York are extremely competitive marketplaces with almost limitless connecting options.
- According to Diio Mi, American is the fourth-largest airline by seats in San Francisco, while JetBlue is the sixth-largest, accounting for a combined 13 percent of the market. However, they aren’t merging in San Francisco – or any other West Coast city – just on flights between New York and Boston.
United flies 10 times a day between San Francisco and New York (8 Newark, 2 JFK) and Delta flies 5 times a day between San Francisco and New York (JFK, 4 times on Saturdays). This outnumbers the combined flights of American and JetBlue by a factor of ten. Indeed, American only runs three flights each day between San Francisco and New York.
Los Angeles – Boston is a competitive route, however based on existing flights, the combination of American and JetBlue increases ‘concentration’ on the circuit. However, keep in mind that there are no slot restrictions in Boston, so other airlines may introduce service. If customers’ costs increase as a result of this nonstop repetition, other carriers will be enticed to join the market.
More From the Wing’s Perspective
The airlines JetBlue and American Airlines face a lawsuit from the U.S. government over their alliance, which the Department of Justice says violates antitrust laws. Reference: airlines jetblue face suit over alliance.
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