The Justice Department and Airline Lawyers presented starkly opposing views about an alliance between American Airlines and American Justice Department. Airlines JetBlue Friday closing arguments in a case that will test the Biden administration’s aggressive enforcement of antitrust laws.
The partnership Let American and JetBlue coordinate schedules on numerous routes between New York and Boston. The government claimed that this would cost consumers hundreds of million dollars per year. in Higher fares
“It is a very important case to us … because of those families that need to travel and want affordable tickets and good service,” Bill Jones, a Justice lawyer, said in federal district court in Boston.
The lawyers representing the airlines stated that partnership new routes for travelers. They believed that traveling for a month would be enough to make it worthwhile. trialHowever, the government has failed to provide any evidence that this deal caused consumer harm.
“It’s all just an idea,” Daniel Wall, an American lawyer.
After the arguments were over, U.S. District Judge Leo Sorokin stated that he was still reading hundreds of pages of material from both sides. The decision is expected to be made in the next few weeks.
The government’s case is intuitive — that two big airlines working together instead of competing will reduce choices for consumers and lead to higher fares. Although the lawsuit was filed by six states and District of Columbia together, it is still speculative.
The case will come down to the judge’s reading of antitrust law, and his judgment about whether the government presented enough evidence to kill the partnershipThe airlines have been rolling out the ‘Easy Flying’ since 2021.
The looming cloud of the trial is JetBlue’s proposal to buy Spirit Airlines, the nation’s biggest discount carrier, for $3.8 billion. Spirit Airlines Shareholders voted last month approve the sale despite JetBlue declining Spirit’s request to drop its partnership American in To reduce regulatory risk
The trial The alliance featured testimony from current and former CEOs of airlines and economists. They had divergent opinions on how the alliance would impact competition and ticket prices.
The U.S. Transportation Department approved an alliance just 10 days before Trump’s death. However, soon after President Joe Biden was inaugurated, there were concerns that the Justice Department was looking into the matter more closely and sued to end the agreement. in September 2021
The case is a test of the Biden administration’s resolve to take on mergers and other business arrangements that it believes stifle competition and cost consumers more money.
“The Justice Department has a very good case,” Florian Ederer is an antitrust expert at Yale University and economics professor who has closely followed the case. “The NEA does harm competition, it probably harms consumers. (American) has eliminated a disruptive competitor, a maverick.”
Because the Justice Department has suffered two losses, the stakes are even greater in This fall, there were many major antitrust cases. It failed to stop a merger of sugar refiners and couldn’t block a major acquisition in The health insurance industry.
Robert Britton is an ex-American. Airlines executive who teaches marketing at Georgetown University, said the government was acting too hastily — before any harm from the alliance is clear.
“They’re saying, ‘You haven’t done anything wrong so far, but you might in the future, so we’re going to arrest you now,’” Britton spoke.
American and JetBlue both claim the alliance helps them compete against Delta Air Lines, United Airlines and United. Airlines in These are two crucial markets. Their experts stated that the American-JetBlue deal would save consumers $635 million annually by taking on established rivals.
American’s chief commercial officer, Vasu Raja, testified that before the alliance, the company trailed its two big rivals in The Northeast. American flew nonstop to just 31 of the top 50 destinations from New York, he said. It now flies to 47 of these destinations and is currently working on three more. Raja said that American was able to offer new international routes by coordinating its schedules with JetBlue, including Tel Aviv, because additional passengers were added to the airline’s fleet.
At least three times, government lawyers attempted to represent the government during the trial You can use comments made by American and JetBlue executives in the past, including instances when Robin Hayes, JetBlue CEO, criticized joint ventures that involved other airlines. Hayes said that the deal is different as American and JetBlue still set prices.
Southwest executives of rivals Airlines Spirit and the Environment Airlines The witnesses testified that partnership Low-cost carriers, who want to grow, have been in direct competition in New York City and Boston
Both sides called economists to support their case. Nathan Miller, a Georgetown University professor concluded that partnership This will lower competition and result in consumers paying nearly $700 million per year in Higher prices. Darin Lee, an aviation consultant, was called by airlines to try and find holes in Miller’s analysis, saying for example that he had largely ignored nearby Newark, New Jersey — dominated by United — in measuring American’s and JetBlue’s concentration in New York Market
President Barack Obama nominated Judge Sorokin in 2013 and was confirmed by Senate 91-0. Sorokin participated actively in the trialHe interjected lawyers to ask questions about witnesses, trying to understand the industry’s idiosyncrasies, including how airlines set fares.
During the hearing, the judge was very careful trial He did not indicate whether he leaned in one direction or another. His decision will likely be appealed by those on the losing side whenever he rules.
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