Collusion to Ecuador?? Airlines spar over slots and service

As drama around the American Airlines/JetBlue Northeast Alliance continues to swell, the battle is spilling over to an unlikely location: Ecuador. Flights between the US and the small South American country are limited to 120 per week by US-based airlines and demand continues to grow. As a result the allocated slots are in reasonably high demand and recent requests for adjustments triggered accusations of collusion outside the approved partnership parameters.

Spirit believes the timing and circumstances of this request must be assessed in the context of the broader public interest questions raised by Spirit, other airlines, airports and consumer groups concerning the anticompetitive impact in New York of the JetBlue and American Northeast Alliance.

Specifically, the timing of JetBlue’s proposed change suggests that the two carriers are coordinating outside the scope of the alliance.

– Spirit Airlines DOT filing

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In early March American Airlines requested permission to shift daily Quito and Guayaquil service from its DFW hub to Miami, claiming strength in demand from South Florida into Ecuador. Just two weeks later, however, JetBlue requested to move its Fort Lauderdale – Guayaquil daily flights to New York City, also claiming strength in demand.

Accusations flying

To Spirit Airlines this appeared beyond reasonable. Why would JetBlue leave the South Florida-Ecuador market if demand was strong, other than to cede capacity to its alliance partner, in violation of anti-trust laws?

Read More: JetBlue plans major route growth with American alliance

Beyond just the Ecuador market, Spirit suggests a pattern of questionable behavior related to American’s new partnerships.  The company calls attention to a similar shift on the West coast: “[I]n July 2020 Alaska Airlines announced expanded service to Los Angeles International from Eugene, Oregon; Fresno, California; and Mansfield, California. Within a week, American updated its schedules to exit these routes.”

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The JetBlue Answer

JetBlue’s answer is a simple one: LATAM no longer operates the route on its 767-300. With those seats gone from the market and demand still high, JetBlue believes it can back-fill capacity with established demand: “[H]istorical load factor data suggests that the New York-Guayaquil market will be underserved this summer.”

Rather than trying to induce new travelers from Fort Lauderdale, the company can cash in on a relatively sure thing.

JetBlue then goes a step further, suggesting that the lawyers involved in the filings are double-dipping with similar claims on behalf of Spirit and Eastern Airlines:

Spirit asserts, with no foundation, that the independent route decisions made by JetBlue and American raise coordination questions but the only apparent coordination appears to involve Eastern and Spirit submitting near-identical complaints drafted by the same Washington law firm.

The Ecuador situation comes to a head as officials indicate they are somewhat receptive to months of complaints by Spirit, Southwest Airlines, and others. The competitors object to the the minimal compromises extracted from JetBlue and American when the NEA partnership gained approval.

That JetBlue also applied this to put its code on the American flights from New York to Buenos Aires is unlikely to help that perception, even if that application is otherwise fine.