California Horns In On The Federal Government’s Lawsuit Against American Airlines And JetBlue

Senator Chuck Schumer good-naturedly quips that the most dangerous place in Washington D.C. is between himself and a TV camera.

However it looks like Schumer has a West Coast competitor in California Attorney General Rob Bonta who has rushed to join the Justice Department’s lawsuit against American Airlines and JetBlue over its Northeast alliance which covers Boston and New York, because reasons.

The suit challenges what they call an anticompetitive joint venture known as the Northeast Alliance, that will affect high-traffic air markets such as San Diego.

…In California alone, this “anticompetitive” venture is expected to impact at least nine airports with flights to and from the East Coast, costing California consumers hundreds of millions of dollars, Bonta said.

Let’s look at this. How, exactly, will the arrangement covering flights to New York and Boston affect… San Diego? American does not operate San Diego to New York or Boston. So… it won’t.

And by the way American doesn’t fly from Sacramento or San Jose to Boston or New York JFK currently, either.

So let’s help California’s Bonta out and look at where American and JetBlue both fly from the West Coast to the East and see what partnering does to competition. (Hint: these are some of the most competitive markets.)

  • This month American Airlines is the second largest carrier at LAX, behind Delta in number of flights, seats, and seat miles. They represent 19% of Los Angeles departures, according to schedule data from Cirium Diio Mi.

  • JetBlue is the seventh largest carrier at LAX based on seats, according to Diio Mi schedule data for September (6th largest based on flights and seat miles).

  • To be sure, both American and JetBlue operate from Los Angeles to both Boston and New York JFK. However United and Delta offer six peak daily LAX-Boston departures, and ten peak daily departures to New York JFK.

    American does not fly Los Angeles – Newark, and United offers eight peak daily LAX-Newark flights. Los Angeles – Boston and New York are highly competitive markets, and connecting combinations are nearly unlimited.

  • Diio Mi shows that in San Francisco, American is the fourth-largest airline by seats and JetBlue the sixth largest, representing a combined 13% of the market. But they aren’t combining in San Francisco – or any West Coast cities – just on New York and Boston routes.

    United flies 10 times a day San Francisco – New York (8 Newark, 2 JFK) and Delta 5 times a day (JFK, 4 times on Saturdays). This dwarves the combined 10 times that American and JetBlue fly. Indeed American operates San Francisco – New York just 3 times daily.

Los Angeles – Boston is competitive, but American and JetBlue combined do increase ‘concentration’ on the rote based on current flights. But remember that there aren’t slot controls in Boston, other airlines can add service. If prices were to rise for consumers on this non-stop rote, that’s just a reason for other carriers to enter the market.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. It’s awful for jobs , companies are using these agreements to get around scope. JetBlue is directly violating labor agreements and doesn’t seem to care at all. This is a far cry from the brand I thought took Care of their people.

  2. @Gary did you mean CA “hones in” to the Federal …… or is “horn in” an aviation pun that’s lost on me?

  3. Pricing for California consumers are affected by this JV. One only has to look at AA/B6 flights codeshare where B6 is the lowest price on AA flights but offers few benefits

    The JV is anti competitive and only offers benefits to the airlines. It allows AA to pursue its course as another domestic low cost carrier.

  4. New York is a wash, but it’s so competitive and dominated by United and Delta, I have no quips with joining together, bringing more international service to the NYC area.

    Boston could be considered anti-competitive, but, as Cranky noted, that’s due to gate space, not slots….and note that Boston is currently in renovations of Terminal E, which is adding 4 more gates, which should allow for up to 40 more planes to operate out of Boston per day.

    This is a ridiculous lawsuit, and AA and B6 should (don’t know if will, I’m not an expert in any of this) come out on top.

  5. JetBlue suspended a ton of service to California with Covid and has yet to indicate if they will ever restore it. Now that they have an alliance with American, they may never restore that service

  6. I am sure a few slots will need to be given up, but DL and UA might need to be invistigated too, which I am sure they don’t want to be under the microscope either. In the end, the NEA will stay or AA will buy jetBlue.

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