(Bloomberg) -- U.S. antitrust enforcers are poised to challenge American Airlines Group Inc.’s alliance with JetBlue Airways Corp., according to a person familiar with the matter.
The Justice Department is planning to file a lawsuit seeking to block the deal as soon as Tuesday, said the person, who declined to be named because the case isn’t yet public.
The expected challenge was reported earlier by the Wall Street Journal. Shares of American Airlines fell 2.1% at 10:27 a.m. in New York, while JetBlue dropped 2.9%. American and JetBlue didn’t immediately respond to requests for comment, and the Justice Department declined t.
Questions about the alliance have expanded since President Joe Biden’s July executive order to broadly increase competition. It called out the airline industry, among others, and said the Transportation and Justice Departments must consult on how consolidation has affected passengers, as well as review the award of flying rights at congested airports.
Under their agreement, which was approved by the Transportation Department, the airlines agreed to sell a combined seven slot pairs at New York’s John F. Kennedy International Airport and lease out a combined six slot pairs to competitors at Ronald Reagan Washington National Airport. Slots are used to control flights at congested airports, and one slot allows for one takeoff or landing. JetBlue and smaller carriers historically have struggled to gain access to slots at some of the largest airports.
The venture allows the carriers to coordinate flights and book passengers on each other’s aircraft in the northeastern U.S., focusing on New York-area airports and Boston. The two airlines say that by working together, they can compete more effectively against United Airlines Holdings Inc. and Delta Air Lines Inc.
JetBlue Chief Executive Officer Robin Hayes in an interview Monday defended the airline’s alliance with American Airlines, saying the Justice Department doesn’t have evidence to support allegations that the accord is anti-competitive.
Spirit Airlines Inc. and Southwest Airlines Co. have filed complaints saying that the agreement was approved without a full public review and have called for renewed scrutiny.
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