The US Department of Justice filed a lawsuit to halt the American Airlines – JetBlue alliance.
The DOJ claims it has increased prices and reduced choice for air passengers traveling to and from the Northeast.
The so-called Northeast Alliance by the airlines operates out of airports in Boston and New York City.
The alliance had been green-lighted at the end of the Trump Administration.
"The department cannot allow American Airlines to further consolidate the airline industry where competition is already in a critical shortage," said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division.
"Consumers will be better off if American and JetBlue continue to be fierce competitors, not allies."
The DOJ says the airlines shared revenues at these airports and trade information on which airline would fly which route.
It ‘significantly diminishes JetBlue’s incentive to compete with American elsewhere.’
It has been described as a de facto merger.
JetBlue CEO Robin Hayes defended the alliance.
"This is not at all like a merger with American — we have two different business models and are not working together on pricing. "It’s also important that you have the full picture on benefits the it is already delivering, and I want to reassure you that the DOJ’s action will not affect our plans to continue implementing the alliance."
