The U.S. Department of Justice has stepped up an antitrust probe of American Airlines Group Inc’s (AAL.O) partnership with JetBlue Airways Corp(JBLU.O) on concerns the deal may lead to inflated fares at key traffic hubs, the Wall Street Journal reported on Wednesday.
American and JetBlue launched the first phase of their partnership in February, even as the Justice Department and attorneys general in New York, Massachusetts and other jurisdictions were reviewing the proposed tie-up with codeshares on nearly 80 routes from New York and Boston.
The Justice Department is concerned that an American-JetBlue deal could reduce competition at congested Northeast airports in New York and Boston, the WSJ reported, citing people familiar with the matter.
Those airports are hubs for U.S. and international travel.
The investigation is continuing and no final conclusions have been reached, according to the report.
JetBlue said it would defer to the Justice Department to “provide specifics” and that its understanding was that the review was ongoing.
“After years of trying, unsuccessfully, to add flying in airports like LaGuardia and Newark, it is clear that the only path for JetBlue to grow is through this alliance,” the airline said in an emailed statement, adding the alliance will bring lower fares.
American Airlines said on Wednesday that it was cooperating with the DOJ’s review.
The Justice Department was not immediately available for comment.
American and JetBlue announced their partnership in July 2020.