The JetBlue-United partnership starts out as pretty weak sauce. Maybe it winds up expanding into a codeshare, with real elite benefits, and even United buying the airline outright. But for now there’s not a lot going on, which means there’s also not much to object to from an antitrust standpoint.
- There’s mileage earning and redemption reciprocity and modest elite benefits (no upgrades or lounge access, at least right away).
- United gets back into New York JFK with 7 daily roundtrip slots starting in 2027 which means more competition for Delta. (But it’s a direct tradeoff with JetBlue’s flights, so not more total flights at the slot-restricted airport. Lack of competition and too-high fares are because of this regime, which Congress controls.)
- And they’ll interline, but not codeshare. United will use JetBlue’s vacation package platform, and JetBlue will use United’s inflight ad platform.
This is pretty de minimis stuff. It’s not nearly as good for consumers as the JetBlue-American Airlines ‘Northeast Alliance’ was. But it also makes Senator Richard Blumenthal’s comments about the deal seem fairly silly.
He wrote to the CEOs of both airlines, demanding things that he isn’t going to get in response to merely a letter.
(1) any contract or agreement between United and JetBlue executed as part of the Blue Sky partnership;
(2) a detailed explanation of all specific changes to consumers’ experience in booking a trip or travelling with United or JetBlue; and
(3) a detailed description of all future phases of the pact, including those still under consideration.
In support of his complaint he says,
- “In fortress hubs like Newark, dominated by a single airline, travelers face fewer and more expensive options.” But JetBlue actually gets a bit better access to Newark, competing with United, out of this deal.
- “Deceptive nickel-and-dime fees for everything from seat assignments to bags have spread to every major airline in part because industry consolidation leaves customers with no alternatives.” Yet Blumenthal does not hammer home here that it’s Congress (him!) that’s incentivizing these fees, effectively subsidizing them through the tax code, since the 7.5% excise tax on domestic airfares doesn’t apply to fees (so the more airlines shove into fees, the more tax they save).
- He worries that “[s]everal aspects of Blue Sky bear notable resemblance to JetBlue and American Airlines’ failed NEA.” But not every deal JetBlue might try violates antitrust!
- In fact, a full merger or acquisition of JetBlue of American may have passed muster under the judge’s ruling! However since the two airlines remained separate, the judge concluded that the ‘carving up markets’ aspect of the partnership was per se illegal. American ceded slots to JetBlue to operate certain flights, jointly deciding who would fly where (like New York – Boston being exclusively a JetBlue route, but hardly limited to thoat one) and then shared revenue.
- The judge in that case made clear that a partnership between American and JetBlue that looked like American’s partnership with Alaska (which includes elite benefits, codesharing, and corporate sales) would have been fine!
- The Trump administration actually approved the American-JetBlue partnership. Then, when the Biden administration took over, they changed their mind and fought it in court. This was legal! It was also problematic from a rule of law standpoint. But it’s worth remembering that even American-JetBlue was approved, and by the current President’s administration.
I don’t love the United-JetBlue deal as a consumer. The American partnership created a third viable competitor to Delta and United in New York. It gave real elite benefits. This does not. And it likely massively increases demand for JetBlue’s copious award space on transatlantic flights (although details of routes and award pricing for mileage redemption has not yet been released – but that’s also the point, in that it appears this too will be limited).
However it’s just not an antitrust problem. Blumenthal will bluster (as he’s wont to do whenever discussing aviation) but he has very little sway at either the Department of Transportation or Department of Justice in the Trump administration. He won’t be able to influence approval or settlement.
We know the senator didn’t write the letters to the airlines. One has to wonder if he actually read them before they were sent.
We know the senator didn’t write the letters to the airlines. One has to wonder if he actually even reads the letters before they were sent.
Senator Palpatine (D-CT) loves to spin a story. Just like a typical career prosecutor
Blumenthal is as senile as “Auto Pen” Joe and Michael Jackson look alike Nancy Pelosi. Like Joe plagerizing his way through college Sidney wanted people to believe he served in Vietnam. Hilarious. Yet they continue to vote for him.
Saigon Dick needs to stay in his own lane, basically drooling over an ice cream cone like his former partner in crime in the Senate.
Biden derangement syndrome in the comments
Gary is right on this: “It’s not nearly as good for consumers as the JetBlue-American Airlines ‘Northeast Alliance’ was.” Seriously. Like, one of the best benefits was getting access to Admirals Clubs while flying jetBlue; yet, United was so cheap here as to not allow access to United Clubs.
As for the Senator’s comments, honestly, who cares? He’s on the ‘out’ team; he can say whatever he wants, and even if it were ‘good,’ it doesn’t matter. If the Dems take back Congress, maybe after 2026, his words might matter. No sweat, folks. So long as UA and B6 don’t upset the King, they’re fine to do as they wish.
@Coffee Please — Oh, so this is just a ‘bash your perceived enemies’ session? Got it.
@David P — Only 2x? Third time would be the charm…
I suspect a lot of this is a pretext for bringing Airline Regulation back. Which would be great for the “Big 3” and freeze out everyone else.
@Gary: when do the reciprocal benefits start? With a United Premier status, will I have to book my B6 flight on UA or B6 to get the benefits (checked luggage etc)? Thank you.
Don’t you people know that the very second you become a senator you are an EXPERT in anything and everything!
1. for the umpteenth time, the DOT under #45 approved the NEA’s slot usage and swap mechanisms but they did not make any decision on the revenue sharing and schedule cooperation parts of the NEA because the DOJ has responsibility over those mechanisms for domestic carriers. 2. Any combination of the current 4 largest carriers in NYC as well as any combination of the big 3 with B6 raise the same potential to reduce low fare competition that was raised under the NEA. The only carriers that would not raise that issue are carriers outside of the big 4 that are also low cost carriers. 3. States can and do file suit in antitrust cases which can force a trial; it is not solely the DOT or DOJ’s decision to do anything – that is part of the division of power in the US system of government.
@Tim Dunn — I woulda gone with ‘gazillion’ or ‘jillion’ but ‘umpteenth’ works, too. Speaking of this administration, do you think He’s still TACOing, or is this latest round of ‘wealth-killing’ tariffs, due to hit in August, for real? Airbus could be about to get much more expensive. Apparently, the market suspects it’s all spectacle, bluffing, etc.
@Tim Dunn – respectfully you do not know what you are talking about.
* DOT is normally granted deference in such reviews. DOJ follows their lead. What happened here was a change in administrations, not each agency doing their separate work.
* The DOT approval was not just about ‘slot usage and swap mechanisms’ as you say, it covered antitrust issues. Here’s the agreement: https://www.transportation.gov/sites/dot.gov/files/2021-01/Agreement%20terminating%20review%20DOT-AA-B6%20with%20appendix%20011021%20website.pdf
See section III Commitments – B6 agreed to continue specific services; the two airlines agreed explicitly what discussions they coldn’t have in network planning conversations (and these limitations applied explicitly to routes outside of the slot swap)
Here is the DOT explaining that their review covers standard antitrust normally handled by DOJ – DOT discusses what to do with DOJ, so that this is a one-stop shop rather than the two agencies having separate efforts. See https://www.federalregister.gov/documents/2020/08/20/2020-18193/review-of-americanjetblue-agreements
“Our review is analogous to the review of notifiable mergers and acquisitions conducted by the Justice Department and the Federal Trade Commission under the Hart-Scott-Rodino Act, 15 U.S.C. 18a, since we are considering whether we should institute a formal proceeding for determining whether an agreement would violate section 41712.
In our review, we consult the Justice Department, which is responsible for enforcing the antitrust laws and may file suit and seek injunctive relief against the parties to an airline agreement, whether or not the agreement is subject to 49 U.S.C. 41720. We seek to avoid duplicative proceedings by this Department and the Justice Department.”
Will you finally admit you’re wrong here? (I know the answer to this – you have admitted error only once that I can recall, and that’s when you claimed… also about the NEA… that no joint venture between US domestic airlines had ever been improved and I showed you otherwise.)
thank you for proving my point, Gary.
There isn’t a line in the documents that you cited that the DOT under any administration gave approval for a joint venture or revenue sharing.
The DOT has that authority for joint ventures between a US and foreign airline but not between two domestic airlines. Other than the one year example between Aloha and Hawaiian, US airlines are not allowed to participate in activities that the NEA included and the DOJ did not change their stance on that policy.
It is you that are desperate to prove that it was government that didn’t get it right when two branches of government didn’t see things the way you THINK they should be.
the fact that you and others think that AA should have been allowed to have the NEA further magnifies that you viewed reality of the handling of the NEA through your own bias.
And UA is trying hard NOT to do the same mistakes that killed the NEA but the most problematic is that UA and B6 are agreeing to not compete – by swapping times at a non-slot controlled airport EWR – so that whatever B6 “gives” UA at JFK is matched by a “give” by UA at EWR.
I am glad you are raising the issue of Blumenthal’s concern about B6/UA but stop clinging to a view of history that simply is not accurate.
DaNang Dick must have some PTSD from the combat he experienced in Vietnam. What a useless clown.
@rjb — You can disagree with his position, but I wouldn’t attack his military service. That’s a ‘bridge too far.’ It wasn’t right when ‘Daddy’ did it to Senator McCain either.
Blumenthal, the man who claimed Vietnam service while actually serving in the USMC Reserves running Toys for Tots campaigns in DC as his compatriots were in Southeast Asia, is never one to be taken seriously.
The tighter the partnership between United and JetBlue becomes, the worse it is for consumers. The last thing the NYC market needs is to become more of a duopoly.
Forgot that Dad spoke disrespect to Sen McCain for “getting shot down.” The man seems to enjoy the respect the military has to give him yet his only military uniform was that of an academy.
Not the place but not too happy about the strong arm ‘mafia Don ‘ approach to everything.
In response to Christian that’s for so many things. There is little competition left with all the mergers so without competition how does Capitalism survive? It’s never a good deal for consumers.