Senior executives of JetBlue Airways and Southwest Airlines argued in court Wednesday over JetBlue’s controversial partnership with American Airlines that the Biden administration is seeking the thwart.
JetBlue CEO Robin Hayes told a federal court in Boston the partnership will help his airline grow, accommodate customers whose flights gets canceled, and attract more corporate travelers.
Hayes disputed the government’s view that the deal will reduce competition and cost consumers hundreds of millions of dollars a year in higher fares.
But Southwest’s Andrew Watterson said he was disappointed that the partnership will give American access to valuable JetBlue slots that American once controlled but was forced to surrender to win regulatory approval of a 2013 merger and a separate transaction.
“We thought that was outrageous,” said Watterson, who will become chief operating officer at Southwest later this week.
The Justice Department, six states and the District of Columbia seek to break up the American-JetBlue partnership in a case that has become a major test of the Biden’s administration’s opposition to mergers and consolidation in key industries. The Transportation Department approved the deal in the final days of the Trump administration.
The case is being heard by U.S. District Judge Leo Sorokin, who was appointed by former President Barack Obama.
Hayes was back on the stand for a second day to defend a partnership that lets JetBlue and American work together on schedules, sell tickets on each other’s flights, and share revenue from flights at four airports in the New York City area and Boston.
Hayes called the partnership “a generational opportunity” that has already helped JetBlue grow from about 200 flights a day in New York to nearly 300 and add dozens of new routes to compete with Delta and United.
Other carriers want to expand in New York too, but federal officials limit takeoff and landing rights, or “slots,” because of congestion.
Senior executives from American, Delta and United are expected to testify. Both sides have lined up economists to discuss how the partnership will affect consumers.