AMERICAN AND JETBLUE JOINT VENTURE CAUSES CONTROVERSY
February 8, 2021
On January 7, 2021, Spirit Airlines filed a complaint to request an on-the-record investigation under 49 U.S.C. § 41712(a) of the codeshare and related joint-venture (NEA) agreements between American Airlines and JetBlue Airways to determine if implementation of these agreements would constitute an anticompetitive unfair method of competition that must be prohibited. Spirit alleged that very little information has been released about the potential American and JetBlue alliance, and that so far, all of DOT’s review has been conducted behind closed doors. Spirit therefore requested that DOT conduct a full investigation of the agreement under § 41712(a), which would include the opportunity for a hearing and submission of public comments. Soon after, DOT further received letters in support of Sprit’s complaint from Southwest Airlines and the National Air Carrier Association.
On January 12, 2021, DOT signed an agreement with American and JetBlue terminating the Department’s review of the joint venture agreements, and established certain commitments by American and JetBlue to address competition issues, Under the agreement, JetBlue and American agreed that: i) JetBlue would not exit any non-seasonal, non-stop routes it served as of February 2020 except JFK-LGB, JFK-OAK, and JFK-ORH for the term of the agreement; ii) the NEA agreements would be amended so there are mandatory limitations on what can be discussed during network planning sessions; iii) the NEA agreements would be amended to limit discretion to withdraw assets and assistance provided under the NEA; and iv) data and reports pertaining to NEA performance would be provided to DOT similar to those required for immunized alliances. JetBlue and American also agreed to the upfront divestiture of 7 slots at JFK and 6 slots at DCA, and the conditional divestiture of up to 10 slot pairs at JFK if they fail to meet certain capacity targets. However, DOT also noted that it retained its authority to investigate and bring enforcement action, and would continue to evaluate whether the public interest review requested by Spirit would be warranted.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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